37th  Congress,  )    HOUSE  OF  REPRESENTATIVES.     (  Report 
•  3d  Session.     j  (  No.  49. 


GOVERNMENT  CONTRACTS. 


March  3,  1863. — Laid  on  the  table  and  ordered  to  be  printed. 

Mr.  Fenton,  from  the  select  committee  to  inquire  into  contracts  of  the 
government,  made  the  following 

REPORT. 

The  special  committee  of  the  House,  appointed  to  inquire  into  all  the  facts 
and  circumstances  connected  with  contracts  and  agreements  by  or  ivith 
the  government  growing  out  of  its  operations  in  suppressing  the  rebel- 
lion, submit  the  following  final  report: 

Since  the  last  report,  submitted  'to  the  House  on  the  17th  day  of 
July,  1862.  your  committee  have  confined  their  labors  principally  to 
the  investigation  with  which  they  were  charged  by  the  resolution  of 
the  House,  of  February  26,  1862,  instructing  said  committee  to 
"inquire  into  the  amount  of  moneys  received  by  the  federal  officers 
in  the  city  of  New  York  by  virtue  of  their  offices ;  also  as  to  the 
ownership  and  rents  of  the  bonded  warehouses  )  also  the  terms,  con- 
siderations, and  profits  of  the  labor  contracts  for  the  storing,  hauling, 
and  delivery,  &c. ,  of  foreign  goods  in  the  city  of  New  York  ;  when 
made,  by  whom,  and  who  are  now  interested  in  the  same." 

The  labors  of  the  committee  have  extended  through  a  period  of 
twenty  months,  and  their  reports  and  the  testimony  taken  will  cover 
nearly  three  thousand  pages  of  printed  matter.  They  have  endeav- 
ored faithfully  to  discharge  the  important  and  onerous  duties  confided 
to  them,  and  the  result  of  their  labors  may  be  found  in  the  many  mil- 
lions of  dollars  saved  to  the  treasury  through  their  investigations. 

The  disclosure  of  the  transactions  which  brought  reproach  upon  the 
western  department  in  the  summer  and  fall  of  1861,  brought  upon  your 
committee  no  small  amount  of  obloquy  and  reproach  from  the  parties 
implicated  in  the  frauds  which  were  exposed.  A  court-martial,  con- 
stituted of  distinguished  officers  of  the  regular  army  of  high  rank, 
was  convened  to  try  3Iajor  Justus  McKinstry,  quartermaster  of  the 
United  States  army,  who  was  charged  with  corrupt  practices  as  a 
public  officer  while  acting  in  that  department.  The  sixty-one  speci- 
fications under  the  charge  were  nearly,  if  not  quite,  all  based  upon 
the  testimony  taken  by  your  committee.  After  a  trial  of  almost 
unprecedented  length,  in  which  the  accused  was  allowed  every  lati- 
tude for  his  defence,  he  was  found  guilty,  in  whole  or  in  part,  on 
twenty-six  specifications.   He  was  convicted  of  the  charge,  and 


Digitized  by  the  Internet  Archive 
in  2014 


http://archive.org/details/governmentcontraOOunit_0 


37th  Congress,  )    HOUSE  OF  REPRESENTATIVES,  j  Report 
3d  Session.      j  (  No.  50. 


GOVERNMENT  CONTRACTS 


March  3,  1863. — Laid  on  the  table  and  ordered  to  be  printed. 


Mr.  Van  Wyck,  from  the  select  committee  on  government  con- 
tracts, submitted  the  following  as  the 

VIEWS  OF  THE  MINORITY. 

PREFACE,. 

On  the  26th  day  of  February,  1862,  the  following,  on  my  motion, 
was  adopted  unanimously  by  the  House : 

Resolved,  That  the  committee  on  government  contracts  be  directed  to  inquire 
into  the  amount  of  moneys  received  by  the  federal  officers  in  the  city  of  New 
York,  by  virtue  of  their  offices ;  also  as  to  the  ownership  and  rents  of  the 
bonded  warehouses  ;  also  the  terms,  considerations,  and  profits  of  the  labor  con- 
tracts for  the  storing,  hauling,  and  delivering,  &c,  of  foreign  goods  in  the  city 
of  New  York ;  when  made,  by  whom,  and  who  are  now  interested  in  the  same. 

The  day  after,  I  was  informed  that  Mr.  Washburne  had  prepared 
a  resolution  to  discharge  this  committee  from  its  consideration,  and 
refer  it  to  a  committee  to  which  Congress  had  refused  the  power  to 
send  for  persons  and  papers,  or  hold  its  sittings  in  any  place  except 
Washington.  I  immediately  saw  and  remonstrated  with  him.  He 
alleged  that  this  committee  had  already  work  enough  to  occupy  its 
time.  I  assured  him  I  would  assume  the  labor  of  taking  the  testi- 
mony, and  thereb}^  the  time  of  the  other  members  would  not  be  re- 
quired. He  requested  me  to  see  other  members  of  the  committee. 
I  immediately  did — all  who  were  present  in  the  hall,  Messrs.  Hol- 
man,  Dawes,  and  Fenton.  They  consented  that  the  resolution  should 
be  retained  by  this  committee,  on  condition  that  I  should  take  the 
testimony.  I  then  informed  Mr.  Washburne  of  their  conclusion,  to 
which  he  assented;  and  it  was  understood  distinctly  that  the  evidence 
should  be  taken  by  myself.  Such  had  previously  been  the  uniform 
practice  of  the  committee,  that  testimony  could  be  taken  by  less  than 
a  quorum.  Accordingly,  on  the  11th  March  I  went  to  New  York 
city  and  commenced  my  labors.  I  then  found  the  committee  in  ses- 
sion with  only  one  member,  Mr.  Dawes,  who  left  that  night.  He  re- 
quested me  to  finish  some  investigations  he  had  commenced.  I 
declined  on  the  ground  it  would  require  all  the  time  I  could  spare 
to  examine  the  matters  of  the  above  resolution.    Mr.  Dawes  left  the 


2 


GOVERNMENT  CONTRACTS. 


same  night.  I  continued  the  meetings  of  the  committee  with  the 
same  stenographer  and  in  the  same  room.  I  held  session  from  day  to 
day  until  the  24th  March,  and  had  examined  fifty  witnesses. 

Not  one  of  them  objected  to  testify,  or  raised  the  point  that  less 
than  a  quorum  had  authority  to  administer  oaths. 

On  the  22d  March  I  was  informed  some  of  the  custom-house  officials 
had  stated  that  the  evidence  was  not  fairly  taken,  that  all  the  testi- 
mony of  the  witnesses  had  not  been  recorded.  I  immediately  wrote 
the  following  note: 

March  22,  1862. 

Gentlemen  :  I  understand  it  is  claimed  that  all  your  evidence  was  not  taken 
down  by  the  stenographer  of  the  committee.    I  wish  you  would  appear  to-day 
at  room  383  of  the  St.  Nicholas,  to  have  inserted  in  your  evidence  anything 
which  was  omitted  and  to  add  anything  thereto  you  may  desire. 
Yours,  &c, 

C.  H.  VAN  WYOK. 
Messrs.  Wardell,  Bayard,  Hunter,  Benedict,  and  Craig. 

and  the  same  day  it  was  served  on  each  of  the  above-named  by  the 
acting  sergeant-at-arms.  All,  or  nearly  all,  of  the  witnesses  appeared. 
They  were  friends  of  the  revenue  officers:  heard  read  their  testimony, 
expressed  themselves  satisfied,  and  pronounced  it  correct. 

On  the  24th  day  of  March  I  received  the  following  despatch  by 
telegraph: 

Washington,  March  24,  1S62. 
I  am  instructed  by  the  committee  to  direct  that  you  proceed  no  further  in 
your  investigations  in  New  York  until  further  orders. 

E.  B.  WASHBURNE. 

This  despatch  resulted  from  the  clamor  of  the  revenue  officers  and 
their  friends.  I  discontinued;  returned  to  Washington;  my  regiment 
was  under  marching  orders,  and  in  a  few  days  moved  with  the  army 
of  the  Potomac,  and  was  absent  with  it  for  many  months.  Up  to  the 
time  of  my  leaving  it  was  not  pretended  to  me  that  the  testimony 
was  not  regularly  taken,  or  without  the  authority  of  the  committee. 
One  of  the  committee,  who  evidently  had  been  in  communication  with 
the  New  York  custom-house,  and  some  others  of  the  committee, 
thought  it  was  best,  inasmuch  as  the  revenue  officers  were  claiming 
that  a  quorum  was  not  present,  to  delay  further  proceedings  until  a 
quorum  could  meet;  and  it  was  not  then  lisped  or  intimated  tome  that 
the  evidence  already  taken  was  without  authority  of  the  committee. 
The  subsequent  action  of  the  committee  showed  it  was  clone  by  their 
authority. 

So  much  solicitude  for  persons  implicated  by  evidence  had  not 
been  manifested  before.  When  the  honorable  member  from  Penn- 
sylvania, Mr.  Davis,  desired  that  his  brother,  a  quartermaster,  to 
whom  allusion  had  been  made  in  the  evidence  taken  by  less  than  a 
quorum,  at  St.  Louis,  should  be  sent  for  as  a  witness,  I  desired  he 


GOVERNMENT  CONTRACTS. 


should  be  subpoenaed,  but  some  of  these  same  members  said  no:  let 
him  come  and  he  can  be  sworn,  but  we  cannot  put  the  government 
to  the  expense  of  subpoenaing  him.  When  General  Fremont's  friends, 
after  his  operations  in  the  west,  had  been  questioned  by  testimony 
taken  by  less  than  a  quorum,  desired  he  should  be  subpoenaed,  I 
urged  that  it  be  done,  and  the  day  before  leaving  Washington  left  a 
written  request  with  a  member  of  the  committee,  so  that  my  position 
might  not  be  misunderstood,  asking  that  he  should  be  subpoenaed. 
Some  of  these  same  members  said  no;  he  can  appear  before  the  com- 
mittee if  he  chooses,  but  we  will  not  subpoena  him  ;  yet  when  the 
revenue  officers  of  the  city  of  New  York  waive  the  magic  wand,  these 
same  gentlemen  order  the  investigation  to  be  suspended.  Nearly  all 
the  testimony  taken  by  this  committee  has  been  by  less  than  a  quorum: 
at  least  seventy  sessions  have  been  so  taken,  sometimes  by  one,  two, 
and  three  members  :  sometimes  the  committee  have  been  sitting  at 
two  places  at  the  same  time.  It  may  be  said  that  a  full  meeting  of 
the  committee  authorized  it  to  be  so  taken,  but  such  was  not  always 
the  fact.  The  testimony  I  took  was  fairly  taken.  Among  the  number 
I  examined  several  from  the  custom-house.  Now,  I  state  distinctly 
that  the  committee,  in  the  spring  of  1862,  considered  this  testimony 
as  having  been  properly  taken.  In  the  first  place,  if  1  was  taking  it 
without  authority,  why  did  the  committee  claim  to  control  my  action 
by  sending  a  despatch  to  discontinue  until  further  orders?  That  shows 
they  had  a  knowledge  of  my  doings,  that  I  was  acting  by  their  au- 
thority and  approbation,  and  that  I  was  under  their  control. 

2.  They  procured  from  the  stenographer  a  copy  of  the  evidence  so 
taken  and  paid  him  for  the  same. 

3.  The  House  had  by  resolution  ordered  this  inquiry,  and  they 
would  not  have  dared  to  violate  the  instructions  by  neglecting  to  take 
testimony;  yet  they  suffer  the  whole  session  to  pass  and  really  do 
nothing  until  September  9,  (although  in  April  and  May  sessions 
were  held  in  New  York  city,  at  one  of  which  Mr.  Ogden  was  examined 
by  them,  whose  testimony  occupied  part  of  two  pages,)  and  con- 
sidering the  testimony  taken  by  me  as  the  testimony  of  the  committeer 
proceed  immediately  to  allow  the  defence  to  be  heard,  and  examine 
no  witnesses  except  those  of  the  household  of  the  custom-houser 
including  Messrs.  Barney,  Andrews,  Dennison,  Isaacs,  Archer,  Brownr 
&c,  and  the  whole  nature  of  the  examination  is  to  exculpate  and 
clear  from  the  evidence  taken  in  March  last.  The  committee  had 
knowledge  of  the  evidence,  and  the  revenue  officers  had  evidently  read 
or  been  informed  of  it. 

The  questions  of  the  committee  and  the  answers  are  predicated 
upon  the  testimony  previously  taken  and  to  contradict  certain  por- 
tions of  it. 

The  whole  examination  at  that  time,  the  form  and  spirit  of  the  ques- 
tions, teas  to  relieve  and  shield  the  officers  from  the  evidence  previously 
taken. 

It  is  unaccountable,  if  the  committee  considered  the  evidence  taken 
in  March  not  taken  by  due  authority,  that  they  should  have  defiantly 
ignored  the  resolution  of  the  house,  and  in  September  employed  only 


4 


GOVERNMENT  CONTRACTS. 


one  day  in  examining  questions  of  varied  import.  No;  the  evidence 
was  tin  n  deemed  valid,  and  when  the  custom-house  officers  had  their 
dav  in  court  the  work  was  supposed  to  be  completed.  Nothing  fur- 
ther was  said  or  done  about  the  matter  until  my  return  to  the  present 
session,  when  action  was  insisted  upon. 

It  was  agreed  to  have  a  meeting  in  New  York  to  conclude  that  and 
other  matters.  1  was  informed  in  Washington  that  the  custom-house 
officers,  or  some  of  them,  had  threatened  and  denounced  the  com- 
mitter, and  would  prosecute  any  person  who  should  publish  the  evi- 
dence taken  in  March.  As  far  as  I  may  be  able,  they  shall  have  an 
opportunity  to  commence  a  suit. 

What  took  place  in  New  York  will  be  explained  by  the  following 
resolutions  The  first  resolution  was  passed  in  my  absence,  when  1 
was  led  to  believe  there  would  be  no  meeting  of  the  committee. 

On  the  17th  day  of  December  it  was — 

"  Resolved,  That  inasmuch  as  certain  testimony  has  been  taken  by  one  mem- 
ber of  the  committee,  in  the  absence  of  a  quorum,  touching  the  official  conduct 
of  certain  federal  officers  in  New  York  under  objection  from  them,  therefore  the 
committee  will  examine  such  testimony,  and  whenever  it  appears  that  the  testi- 
mony of  any  such  witness  so  taken  is  found  to  affect  the  official  conduct  of  any 
such  person,  such  witness  shall  be  re-examined,  and  so  far  as  his  testimony  on 
re-examination  affects  the  official  conduct  of  any  federal  officer  in  New  York  it 
shall  be  submitted  to  him  for  his  inspection." 

There  is  no  pretence  that  the  testimony  ivas  taken  without  the  authority 
and  approbation  of  the  committee.  Mark,  they  do  not  object,  but  the 
federal  officers  do. 

When  I  ascertained  the  nature  of  the  resolution  I  offered  the  fol- 
lowing, which  was  voted  down: 

"  Whereas,  at  a  meeting  of  this  committee  at  Washington,  a  few  days  since,  it 
was  agreed  and  understood  that  a  full  meeting  of  the  committee  should  be  held 
in  New  York  city  to  complete  the  investigation  relating  to  the  New  York  cus- 
tom-house and  other  matters  ;  whereas  it  was  understood,  before  leaving  Wash- 
ington, that  the  committee  should  meet  in  the  basement  No.  14  Pine  street,  a 
room  tendered  by  Hon.  E.  Haight  for  the  use  of  the  committee;  and  whereas 
a  portion  of  the  committee,  in  the  absence  of  Messrs.  Holman  and  Van  Wyck, 
Mr.  Holman  not  yet  having  reached  the  city,  and  Mr.  Van  Wyck  was  at  14 
Pine  street  awaiting  the  committee  until  he  learned  they  had  secured  a  room  in 
the  custom-house,  called  on  Hon.  H.  B.  Stanton,  deputy  collector,  was  shown 
the  room  in  state  of  preparation  for  the  committee,  not  yet  cleaned  or  warmed, 
who  waited  in  the  room  of  Mr.  Stanton  some  time  for  the  members  of  said  com- 
mittee, and  when  several  of  them  had  arrived  it  was  understood  that  no  meeting 
should  be  held  that  day  as  there  were  no  witnesses  present,  and  Mr.  Holman  had 
not  arrived,  yet  before  that  interview  a  portion  of  the  committee  had  met  in 
another  room  in  the  custom-house,  not  the  one  assigned  to  the  committee,  and 
adopted  the  resolution  of  December  17th,  therefore — 

Resolved,  That  said  resolution  of  December  17  be  reconsidered. 

I  then  asked  leave  to  have  the  following  protest  placed  on  the 
journal  of  the  committee,  which  was  denied  : 

C.  H.  Van  Wyck,  a  member  of  the  committee,  desires  to  have  entered  upon 
the  journal  of  this  committee  his  protest  against  any  action  by  this  committee, 
whereby  any  part  of  tin?  evidence  taken  by  him  in  March  last,  in  the  city  ot 


GOVERNMENT  CONTRACTS. 


5 


New  York,  as  to  moneys  received  by  the  federal  officers  in  the  city  of  New 
York,  &c,  shall  be  suppressed  or  not  published.  While  he  is  willing  that  any 
of  the  witnesses  examined  by  him  shall  be  allowed,  at  their  own  suggestion  or 
the  request  of  any  of  the  officers  they  implicate,  to  again  appear  before  the  com- 
mittee and  make  any  explanation  or  addition  they  desire,  he  is  not  willing  to  do 
anything  on  his  part  which  may  be  considered  a  relinquishment  of  his  right 
to  have  such  testimony,  so  taken  by  him,  published. 

That  all  the  witnesses  examined  by  him  appeared,  and  were  examined  with- 
out any  objection  on  their  part. 

By  the  committee's  resolution  of  December  17  they  recognized  the 
validity  of  the  testimony.  They  do  not  object  to  any  part  thereof, 
they  only  shoiv  an  amiable  tenderness  to  those  portions  which  reflect  upon 
the  revenue  officers,  and  propose  to  examine  only  the  witnesses  implicating 
them.     The  other  portions  of  the  testimony  they  did  not  propose  to  disturb. 

The  committee  did  not  then  pretend  the  evidence  had  been  taken  without 
their  authority .  I  then  and  there  declined  to  do  any  act  which  would 
seem  a  waiver  on  my  part  of  the  right  to  use  all  the  testimony  pre- 
viously taken. 

This  evidence  was  before  the  committee.  The  clerk  of  the  com- 
mittee had  made  an  abstract  of  the  same  for  its  use;  yet,  most  re- 
markable of  all,  but  two  or  three  of  the  witnesses,  reflecting  upon  the 
public  officers,  are  recalled,  and  the  most  important  ones  are  not  sum- 
moned.   The  reason  of  this  a  discerning  public  will  determine. 

If  there  had  been  errors,  injustice,  and  corruption  in  the  custom- 
house in  other  times,  it  had  not  evidently  been  purged  under  the  ad- 
ministration of  the  present  officers;  that  was  so  plain  that  he  who 
runs  may  read. 

The  evidence  was  concluded  in  New  York,  and  the  journal  shows 
that  on  the  tenth  of  January  testimony  was  taken  by  one  member  of 
the  committee,  Mr.  Dawes,  and  on  the  twenty-sixth  by  one  member, 
Mr.  Fenton;  yet  that  evidence  did  not  reflect  on  the  revenue  officers. 
It  possibly  makes  some  difference  whose  ox  is  gored 

On  Monday  evening,  February  9,  I  called  on  Mr.  Andrews,  clerk 
of  the  committee  at  Washington,  to  examine  the  evidence  taken  in 
March,  and  was  informed  by  him  I  could  not  see  it  except  by  order 
of  the  committee.  I  inquired  as  to  the  journal,  and  if  the  resolu- 
tion I  had  offered  in  New  York,  and  had  been  voted  down,  was  prop- 
erly entered  there.  He  replied,  no;  that  the  committee  had  ordered 
it  should  not  be  entered  in  the  journal.  I  called  on  each  member  of 
the  committee  to.  know  about  the  order  preventing  an  inspection  of 
the  testimony,  and  every  one  except  Mr.  Washburne  disclaimed  any 
knowledge  of  any  such  order  or  action  of  the  committee. 

A  meeting  of  the  committee  was  held  on  the  evening  of  February 
11,  when  I  insisted  upon  my  right,  as  a  member,  to  examine  such 
evidence.  By  this  act  the  committee  recognized  it  as  their  evidence, 
for  had  1  taken  it  without  authority  then  it  belonged  to  me,  and  they 
had  no  control  over  it,  but  there  was  a  persistent  determination  on 
the  part  of  some  of  the  members  to  prevent  me  from  seeing  it.  At 
that  meeting  Messrs.  Fenton,  Washburne,  and  Holman  were  present, 


6 


GOV KRNMENT  CONTRACTS. 


and  they  were  willing  1  should  take  the  evidence  if  I  would  pledge 
myself  not  to  use  it.  1  spurned  the  proposition,  and  treated  it 
as  it  deserved.  What  can  be  the  motive  lor  such  conduct? 
Why  were  they  afraid  of  the  evidence?  Was  it  because  the  cus- 
tom-house officers  had  threatened?  Was  the  evidence  harmless, 
then  no  body  could  be  injured  by  its  publication.  Could  it  be  contra- 
dicted, then  nothing  more  easy,  for  the  custom-house  did  not  want 
for  friends  on  the  committee.  Did  it  show  corruption  and  criminate 
tin  officers,  then  duty  required  its  exposure.  However,  a  resolu- 
tion was  read  by  Mr.  Washburne  saying*  it  should  be  deposited  with 
the  clerk  of  the  House  for  the  inspection  of  members  of  the  com- 
mittee, and  the  resolution,  as  read,  substantially  said  no  more.  On 
the  next  day  I  understood  that  the  resolution  contained  the  words 
"that  the  testimony  was  taken  without  authority  of  the  committee.'' 
If  such  words  were  in  the  resolution  they  were  omitted  in  reading, 
evidently  for  a  purpose,  for  I  would  not  quietly  have  suffered  that  to 
pass  on  the  journal;  and  the  next  day  I  asked  Mr.  Holman  if  any  such 
words  were  read,  and  he  emphatically  denied  it.  I  am  thus  minute 
in  this  matter,  for  this  attempt  to  falsify  the  record  and  interpolate, 
first,  to  have  a  declaration  of  the  committee  against  the  evidence  and 
against  myself,  that  I  had  acted  without  authority,  gives  me  the  right, 
as  a  matter  of  the  highest  privilege,  to  vindicate  myself,  and  is  clearly 
a  justification  for  stating  what  took  place  in  the  committee  room. 

Since  writing  the  above  I  have  obtained,  and  have  now  in  my  pos- 
session, the  original  resolution ;  I  give  it  entire,  so  the  world  may  see 
the  motive  which  actuated,  and  the  ends  sought  to  be  accomplished 
by  any  means,  no  matter  how  unfair  and  dishonorable.  The  resolu- 
tion was  written  at  the  room  of  Mr.  Fenton,  in  the  National  Hotel, 
where  the  committee  was  in  session,  by  Mr.  Washburne,  and  was  writ- 
ten with  ink.  The  resolution,  as  read  by  Mr.  Washburne,  did  not 
contain  the  words  which  are  now  interlined.  The  interlinations  are 
in  pencil  and  were  not  put  in  when  first  written,  for  ink  wras  used; 
and  could  not  have  been  put  in  at  that  time,  for  he  would  not  have 
procured  a  pencil  when  pen  and  ink  was  by  his  side.  The  resolution 
was  drawn  up  just  as  Mr.  Hollman  and  myself  were  leaving;  here  it 
is,  as  read  to  the  committee: 

"  Ordered,  that  certain  testimony  taken  by  Mr.  Van  Wyck,  in  New 
York,  be  deposited  by  the  clerk  of  this  committee  with  the  Clerk  of 
the  House,  with  directions  to  the  said  Clerk  to  hold  it  in  his  posses- 
sion, subject  only  to  the  inspection  of  any  member  of  the  committee. ,? 

In  the  body  of  the  resolution  are  three  erasures  in  ink;  one  inter* 
lination  in  ink  erased  in  ink,  and  the  word  it  interlined  in  ink. 

The  resolution  as  it  how  appears  is  as  follows: 

Ordered,  that  certain  testimony  taken  by  Mr.  Van  Wyck,  in  New 
York,  without  the  authority  of  the  committee,  be  deposited  by  the  clerk 
of  this  committee  with  the  Clerk  of  the  House  of  .Representatives,  with 
directions  to  the  said  Clerk  to  hold  it  in  his  possession,  subject  only 
to  the  inspection  of  any  member  of  the  committee.' ? 

The  words  11  without  authority  of  the  committee,''1  and  'lqf  Repre- 
sentatives" interlined  in  pencil. 


GOVERNMENT  CONTRACTS. 


7 


That  gives  character  and  motive  to  the  whole  of  the  attempts  to 
suppress  this  evidence.  Foolish  man  !  Did  he  expect  by  this  leger- 
demain to  keep  back  the  frauds  of  the  custom-house?  Vain  hope! 
Look  for  a  moment  at  the  resolution  as  drawn,  read,  and  acted  upon 
by  the  committee  wlio  recognized  it  as  testimony,  and  the  committee 
are  making  disposition  of  it  as  testimony  of  the  committee;  but  after 
it  is  discovered  he  was  snared  in  his  own  meshes,  then  it  is  interpolated 
to  remove  the  difficulty,  never  believing  that  the  evidences  of  the 
mode  of  procedure  would  ever  be  seen  by  the  public. 

The  next  day  the  evidence  was  and  now  is  deposited  with  the  Clerk 
of  the  House.  I  have  printed  with  this  report  only  a  part;  such 
portion  as  illustrates  the  views  I  propose  to  offer  in  regard  to  the 
matters  embraced  in  the  resolution.  It  will  remain  with  the  Clerk,  to 
be  used  by  this  or  the  next  House  of  Congress  if  they  desire. 

MONEYS  RECEIVED  BY  REVENUE  OFFICERS. 

By  the  resolution  the  committee  were  instructed  to  inquire — 
First,  as  to  the  amount  of  moneys  received  by  the  federal  officers 
in  the  city  of  New  York.    This  involved  the.  examination  of  many 
witnesses,  and  in  regard  to  the  revenue  officers  a  great  diversity  in 
judgment. 

One  thing  is  remarkable:  that  the  collector,  Barney,  surveyor, 
Andrews,  and  naval  officer,  Dennison,  are  neither  of  them  able  to 
say  how  much  money  they  received,  they  will  only  swear  that  Mr. 
Ogden,  the  auditor,  has  the  account  of  it.  Mr.  Ogden,  from  his  re- 
port, made  up  in  January  last,  shows  from  $21,000  to  $22,000 
yearly  to  each  of  those  officers;  while  Mr.  Cargill,  formerly  deputy 
collector,  and  fully  competent  to  know,  fixes  the  amount  of  the  last 
four  years,  independent  of  salary,  to  each,  $150,000,  and  Mr.  George 
D.  Bayard,  at  present  in  the  seizure  bureau,  capable  of  judging, 
makes  the  amount  $30, 000,  annually,  independent  of  salary.  As  if 
these  enormous  sums  are  not  enouuh  for  the  collector,  he  has,  in 
addition,  commissions  on  States'  fees  collected  by  his  authority,  viz: 
harbor  master's,  health  officer's,  and  the  seaman's  retreat  hospital 
fees,  amounting  to  nearly  $4,000. 

There  was,  of  necessity,  in  March  last  much  inquiry  as  to  the  source 
and  the  manner  of  obtaining  penalties  and  forfeitures.  And  it  would 
appear  that  all  the  censurable  practices  of  the  custom-house  are  still 
retained.  It  is  not  only  unjust  to  persons  charged  with  violations  of 
the  revenue  laws  but  to  the  honest  and  honorable  importer.  Honest 
merchants  have  to  pay  an  excess  of  duties  in  order  to  avoid  the  ra- 
pacity of  the  system,  and  the  practices  which  now  prevail  would  dis- 
grace a  mock  auction  or  Peter  Funk  establishment. 

The  evidence  shows  that  nearly  all  the  violations  of  the  revenue 
laws  are  not  smuggling  really,  but  introducing  goods  undervalued; 
nine-tenths  of  the  fines,  penalties  and  forfeitures  are  from  that  source. 
The  evidence  further  shows  that  efficient  and  honest  officers  could 
prevent  or  rather  detect  at  the  time  of  its  commission  such  violations 
of  the  laws.    But  the  interest  of  the  revenue  officers  is  not  to  detect 


8 


GOVERNMENT  CONTRACTS. 


and  punish  at  the  time,  but  to  encourage  such  infractions,  for  it  leads 
to  large  sums  in  the  future. 

A  man  will  be  allowed  to  continue  with  slight  undervaluations, 
from  time  to  time,  and  when  a  large  stock  of  goods  presents  then 
an  army  of  custom-house  officers  come  suddenly  upon  him.  seize  all  his 
goods,  whether  or  not  liable  to  forfeiture,  take  all  his  books,  private 
papers,  <fcc,  whether  authorized  or  not;  and  the  man  must  be  bank- 
rupted and  ruined,  or  disgorge  as  may  be  demanded. 

It  may  be  said  that  this  statement  proceeds  on  the  presumption  that 
the  officers  are  actuated  by  cupidity.  Most  certainly,  for  so  your 
laws  proceed.  The  giving  a  share  of  these  fines  and  penalties  to  rev- 
enue officers  is  wrong.  It  has  been  said  that  a  few  years  since  the 
law  was  changed,  and  then  the  government  obtained  no  fines  and  penal- 
ties. And  each  one  of  the  present  revenue  officers  has  argued  that 
under  any  other  system  the  laws  would  not  be  enforced,  thereby  ad- 
miting  that  they  would  not  do  their  duty  unless  they  can  share  the 
plunder.  They  say  that  officers  must  be  stimulated  to  duty  through 
the  mean  gratification  of  their  avarice  and  cupidity,  and  they  un- 
blushingly  claim  that  the  obligation  of  an  oath  to  perform  duty  is  not 
as  binding  as  the  privilege  to  enter  some  importer's  store  and  confis-  ✓ 
cate  his  goods,  whereby  their  own  pockets  are  to  be  filled. 

Such  motives  for  duty  are  not  more  honorable  than  those  actuating 
the  smuggler.  The  revenue  officers  claim  that  they  incur  great  risk 
and  danger  in  making  seizures,  the  evidence  shows  nothing  of  the 
kind.  The  revenue  officers,  who  receive  $20,000,  $30,000,  or  $40,000 
per  year,  incur  no  risk  or  danger,  neither  do  they  themselves  detect 
frauds.  Outsiders  sometimes  give  the  information,  and  frequently 
the  employes,  or  detectives,  who  are  employed  for  that  purpose,  ferret 
them  out.  These  men  are  paid  a  salary :  and  although  they  are  really 
informers,  and  entitled  to  a  share,  yet  they  are  never  allowed  to 
claim  it;  and  there  is  a  rule  possibly  implied,  although  Mr.  Dennison 
endeavored  to  testify  to  the  contrary,  that  an  employe  should  not 
claim  the  informer's  share.  Should  he  make  application  for  it  he 
would  not  be  long  in  receiving  notice  of  dismissal.  Now7,  if  detec- 
tives and  employes  like  Brown,  Isaacs,  Archer,  and  Graham  can  be 
faithful  to  their  employers  on  a  salary  without  a  share  of  the  seizures, 
why  cannot  Messrs.  Barney,  Andrews,  and  Dennison  be  equally  so 
to  their  employer,  the  government.  Messrs.  Barney,  Andrews,  and 
Dennison  are  not  censurable  for  taking  all  the  law  will  give  them,  but 
the  fault  is  in  the  law  itself.  This  House  did,  at  its  last  session,  pass 
an  act  limiting  the  compensation  of  each  officer  to  $10,000,  but  the 
Senate  refused  to  concur,  and  there  the  responsibility  rests. 

When  an  importer's  goods  are  seized  he  must  either  pay  the 
amount  demanded  or  be  ruined;  such  is  the  machinery  of  the  pro- 
ceedings, that  he  knows,  and  that  the  revenue  officers  know  it 
is  not  unlikely  the  seizure  proceeds  as  upon  that  hypothesis. 
In  this  connexion  is  the  significant  fact  that  most  of  the  seizures 
are  made  of  foreign  houses,  who  do  not  fully  understand  the 
ways  of  the  system  until  taught  by  dear  experience.  The  testimony 
shows  that  smuggling  could  be  stopped  as  easily  as  the  fitting  out 


GOVERNMENT  CONTRACTS. 


9 


slavers.  Y"et  the  fact  is  notorious,  that  violations  of  the  revenue  laws 
are  increasing,  while  the  efficient  marshal  of  New  York  has  entirely 
broken  up  the  fitting  out  of  slavers;  it  is  to  the  interest  of  the  revenue 
officers  that  smuggling  should  not  be  discontinued. 

The  honest,  honorable  importer  also  suffers.  The  evidence  is 
abundant  that  many  of  them  increase  the  invoice  price  of  their  goods 
beyond  the  actual  value,  so  that  they  may  be  entirely  free  from  the 
possibility  of  a  seizure  and  ruin.  This  is  unjust.  A  great  govern- 
ment should  protect  its  citizens  from  any  such  reproach.  In  many 
seizures,  after  taking  all  his  goods,  books,  and  private  papers,  they 
manifest  a  great  interest  in  the  welfare  of  their  victim,  and  are  per- 
sistent in  recommending  counsel.  The  bevy  would  besiege  him,  by 
turns,  generally  recommending  Mr.  Dunning  0r  Craig.  I  would  say 
nothing  derogatory  to  the  character  of  either  of  those  gentlemen, 
but  I  do  aver  that  the  men  who  had  seized  the  prize  would  not  do 
anything  willingly  to  have  it  escape.  Many  of  the  witnesses  state 
the  whole  detail  of  this  mysterious  procedure,  but  the  testimony  of 
Mr.  Mendelson  is  so  intelligent  and  complete.  I  have  annexed  his 
statement  entire. 

In  such  cases  the  revenue  officers  would  never  give  a  receipt,  but 
always  exacted  a  written  consent  from  the  unfortunate  man,  so  that 
he  could  not  prosecute.  Mr.  Ogden  in  his  evidence  explains  fully 
why  they  armed  themselves  with  this  precaution.  Such  conduct  can 
only  be  explained  on  one  theory. 

The  custom-house  has  presented  no  record  of  the  amount  or  distri- 
bution of  money  received  as  bribes.  A  remarkable  fact  is  stated  in 
Isaac's  testimony  of  September  9  : 

"I  have  never  in  my  life  received  a  shilling  from  any  individual, 
except  where  it  has  been  paid  to  the  collector,  surveyor,  or  naval 
officer  as  money  presented  to  me  as  a  bribe.  For  instance,  here  is 
money  (showing  a  roll  of  bills)  which  was  offered  to  me  this  morning 
as  a  bribe.  I  received  it,  and  then  seized  the  man's  goods,  and  sent 
them  to  the  public  store.  We  often  take  such  money  when  offered  to 
us  as  a  bribe,  but  we  always  deliver  it  to  the  custom-house  officers.'7 

It  may  be  difficult  to  make  some  persons  believe  that  the  smug- 
gling fraternity  would  part  with  money  without  receiving  or  being 
fully  assured  of  a  valuable  consideration. 

The  law  in  all  cases  requires  that  where  the  value  of  the  goods 
seized  exceeds  one  hundred  dollars,  the  matter  shall  pass  through  the 
hands  of  the  district  attorney;  yet  the  present  revenue  officers,  for 
the  first  time  in  the  history  of  the  custom-house,  openly  set  at  de- 
fiance this  law.  and  ignore  it  entirely;  and  when  some  of  the  subor- 
dinates remonstrate  and  warn  them,  upon  mature  deliberation  they 
determine  to  continue  its  violation,  alleging  as  the  only  reason  that  if 
the  law  is  complied  with  fees  of  other  officers  are  taken  from  the  pro- 
ceeds, and  not  so  much  will  therefore  find  its  way  into  their  pockets, 
designedly  breaking  the  law  for  their  own  gain.  The  evidence  is 
clear  on  this  point;  vet  these  are  the  men  who  are  to  be  allowed  com- 
pensation beyond  that  of  the  President  of  the  United  States,  five  times 


10 


GOVERNMENT  CONTRACTS. 


that  of  cabinet  ministers  and  judges  of  the  Supreme  Court,  and  ten 
times  that  of  senators  of  the  United  States;  and  then,  as  I  have  been 
informed,  have  the  reeklessness  to  threaten  a  committee  of  investi- 
gation, if  it  does  not  suppress  evidence  ! 

The  concurrent  testimony  of  many  witnesses,  uncontradicted  even 
by  the  evidence  furnished  from  the  custom-house,  establishes  the  fore- 
going statements;  yet  it  was  deemed  necessary  to  introduce  only  the 
following-  : 

Henry  A.  Cargill,  sworn: 

Question.  Have  you  been  for  some  time  past  employed  in  the  New  York 
custom-house  ? 
Answer.  Yes,  sir. 

Question.  For  how  long,  and  up  to  what  time  I 

Answer.  I  have  been  twice  in  the  custom-house  ;  once  under  Lawrence,  under 
Polk.  After  that,  I  have  been  deputy  collector  two  years  last  April.  Before 
that  1  was  chief  clerk  in  the  invoice  department,  I  think  six  or  eight  months. 
I  have  been  deputy  collector  for  two  years  last  April. 

Question.  When  did  you  leave  the  office  ? 

Answer.  I  think  the  12th  of  April  last. 

Question.  What  position  did  you  occupy  the  last  time  you  were  in  office  ? 
Answer.  Deputy  collector. 

Question.  Who  succeeded  you  in  your  department  ? 

Answer.  Mr.  Coventry  D.  Wardell,  who  is  the  head  of  the  department,  and 
Mr.  George  D.  Bayard,  in  the  seizure  department. 

Question.  Does  Mr.  Wardell  occupy  the  same  position  you  did  ? 
Answer.  Mr.  Henry  B.  Stanton  does. 
Question.  Who  would  be  likely  to  know  of  this  book  ? 
Answer.  Mr.  Wardell  and  Mr.  Bayard. 

Question.  Had  you  in  your  office,  or  anywhere,  a  memorandum  of  seizures 
made  upon  land  and  upon  shipboard  wrhile  you  were  chief  clerk  1 

Answer.  Yes,  sir ;  there  was  a  book  of  that  kind  made  out  by  George  D. 
Bayard,  at  the  instance  of  Mr.  Schell,  about  four  months  before  I  left.  I  rather 
think  Mr.  Schell  has  got  that  in  his  possession,  but  the  auditor  has  got  all  that 
information  on  his  books  with  regard  to  the  final  settlement  of  cases  and  the 
amount  paid  in  each  case.  He  made  up,  at  the  instance  of  Mr.  Schell,  a  book 
of  all  the  cases  at  the  time.  I  have  a  book  also  myself  that  would  give  a  great 
deal  of  information.  I  had  to  go  through  and  select  out  everything  outstanding 
that  had  not  been  settled.  I  made  up  a  book  of  that  kind,  and  that  is  in 
the  office.  I  made  it  up  of  all  cases  that  had  not  been  prosecuted  from  the 
time  Mr.  Schell  came  into  office  until  he  left,  that  is  to  say,  until  six  or  eight 
months  or  a  year  before  he  left.  That  book  was  too  small,  and  I  transferred  it 
to  another  larger  book.  But  there  is  simply  the  name  of  the  case  and  how  they 
were  settled,  that  is  to  say,  it  was  a  sort  of  memorandum  book. 

Question.  That  book  was  continued  up  to  the  time  you  left  ? 

Answer.  It  was  about  a  year  before  I  left. 

Question.  You  did  not  get  down  everything  that  was  compromised  ? 
Answer.  No. 

Question.  This  book  was  kept  for  cases  where  there  was  a  contest  ? 

Answer.  Yes,  sir.  When  this  book  ran  out,  I  got  a  new  book,  and  had  all 
those  cases  that  stood  open  copied  into  this  other  book,  Of  those  settled  there 
is  a  memorandum  made  of  how  they  were  settled. 

Question.  Does  this  last  show  the  number  of  all  cases  settled  and  unsettled  ? 

Answer.  No,  sir.  The  two  books  together  show  all  the  unsettled  cases  at  the 
time  I  took  charge  of  it  . 


GOVERNMENT  CONTRACTS. 


11 


Question.  What  was  Mr.  Craig's  business  in  the  custom-house? 
Answer.  He  was  chief  clerk  of  the  collector  when  I  first  went  into  the  office, 
and  had  charge  of  all  the  seizure  business  at  that  time. 
Question.    What  was  his  salary? 

Answer.  Twelve  hundred  dollars  ;  but  before  Mr.  Schell  went  there  he  had 
one-third  of  Mr.  Redlield's  profits  ;  but  Mr.  Schell  never  gave  him  anything  of 
the  kind.  He  became  dissatisfied,  and  after  some  negotiation  with  the  naval 
officer  went  into  outside  business.  I  was  then  called  upon  to  know  whether  I 
could  undertake  the  business  of  this  office.  And  I  took  it  for  my  own  salary, 
$2,500  per  annum. 

Question.  Mr.  Craig  received  one-third  from  Mr.  Redfield  ? 

Answer.  He  told  me  Mr.  Redfield  had  always  given  him  that. 

Question.  Why  should  they  give  him  one-third  ? 

Answer.  Not  one-third  of  the  whole,  but  one-third  of  the  collector's  share, 
because  of  the  vigilance  with  which  ^he  thing  was  done. 

Question.    How  much  money  did  it  amount  to  during  the  four  years  \ 

Answer.  During  the  four  years  I  always  thought  it  amounted  to  8150,000 
apiece — to  the  collector,  the  naval  officer,  and  the  surveyor. 

Question.  You  had  the  whole  control  of  it  during  the  time  you  were  there  \ 

Answer.  Yes,  sir ;  but  not  the  receiving  of  the  money.  The  letter  books 
will  show  the  amounts  that  were  prosecuted  for.  The  letter  books  were  under 
the  control  of  the  deputy  collector,  Church.  They  show  every  case ;  for  in- 
stance, when  prosecution  took  place,  and  consent  to  receive  an  amount  agreed 
upon,  and  consent  to  the  condemnation  of  the  goods.  Whenever  they  have 
agreed  to  the  amount,  it  is  prosecuted  for  that  amount,  and  then  a  letter  is 
written  up  to  the  district  attorney  stating  that  they  think  it  best  for  the  govern- 
ment that  this  amount  should  be  taken. 

Question.  You  also  knew  from  the  making  up  of  this  book,  not  only  the  two 
years  you  were  in,  but  also  from  the  examination  of  the  letter  books  the  two 
years  previous  ? 

Answer.  Yes,  sir ;  I  knew  the  cases  unsettled. 

Question.  Where  did  the  settled  cases  go  that  you  did  not  have  in  your 
memorandum  ? 

Answer.  In  the  letter  book. 

Question.  Does  the  auditor  have  that  also  ! 

Answer.  Yes,  sir. 

Question.  Then  the  letter  book  shows  every  case  that  is  settled  ? 
Answer.  Yes,  sir. 

Question.  From  all  this  you  judged  they  received  $150,000  apiece  ? 
Answer.  Yes,  sir.    I  think  each  one  would  get  in  four  years  pretty  near 
$150,000. 

Question.  Do  you  think  the  letter  book  shows  this  ? 

Answer.  Yes,  sir ;  they  are  bound  to  show  the  exact  amount  they  receive. 
If  there  is  an  informer  he  gets  one-third  of  the  whole  amount.  The  govern- 
ment gets  one  half,  but  there  are  very  few  informers,  not  more  than  a  dozen; 
they  would  not  allow  an  officer  to  become  an  informer.  I  have  heard  Mr. 
Brown,  Mr.  Isaacs,  and  Mr.  Archer  all  say  it,  and  have  heard  that  Mr.  Hart 
said  that  he  would  not  have  an  officer  in  the  place  that  would  insist  upon  becom- 
ing an  informer,  because  it  was  their  duty  to  do  this;  that  he  had  given  them 
a  good  berth,  with  little  or  nothing  to  do,  except  when  called  upon  on  express 
occasions.  ■ 

Question.  What  officers  did  he  refer  to  ? 

Answer.  Brown,  Isaacs,  and  Archer,  the  three  principal  ones,  aud  Mr.  Gra- 
ham, I  believe. 

Question.  Their  business  related  to  seizures  ? 
Answer.  Yes,  sir. 


12 


GOVERNMENT  CONTRACTS. 


Question.  Those  were  the  men  he  would  not  allow  to  be  informers  ? 
Answer.  Yes,  sir. 

Question.  They  must  do  this  work  and  receive  their  salary  and  not  receive  a 
part  of  the  proceeds  of  the  sale  ? 

Answer.  Yes,  sir ;  they  were  not  entitled  to  it  unless  they  they  actually  be- 
came informers. 

Question.  They  were  required  to  give  information  without  becoming  in- 
formers ? 

Answer.  Yes,  sir.  I  knew  of  a  case  under  Mr.  Barney,  when  there  was  a 
compromise  between  $12,000  and  $25,000;  I  think  that  was  four  or  five  months 
ago.  The  way  I  knew  was,  I  had  a  tenant  who  was  an  informer,  and  he  expected 
to  get  $5,000  or  $6,000.  It  was  a  case  of  leather.  The  parties  lived  in  New- 
ark. Ines,  I  think,  is  one  of  the  names.  That  was  settled.  A  case  was  made 
out  and  the  money  was  paid  into  court,  TJhe  informer  was  one  Franklin,  who 
was  doing  business  for  E.  K.  Alburtis,  17  Wall  street.  They  came  to  a  deter- 
mination to  receive  so  much,  and  that  was  paid  into  court  and  distributed.  He 
was  to  get  one  quarter,  but  they  disputed  it  with  him.  They  said  they  had 
the  information  beforehand,  and  would  not  allow  him  so  much,  and  for  politi- 
cal purposes  they  cut  down  his  one  quarter.  He  told  me  he  ought  to  have  re- 
ceived more  than  he  did.  He  wrote  a  letter  to  the  collector  stating  that  he 
claimed  one  quarter  of  that  whenever  paid  into  court,  and  he  also  gave  informa- 
tion that  he  was  informer  as  to  three  or  four  other  cases. 

Question.  What  do  you  mean  by  "political  purposes?" 

Answer.  I  do  not  know ;  he  said  there  was  some  arrangement  between  them ; 
he  did  not  want  to  be  too  strong,  for  fear  he  would  not  get  anything ;  they  pre- 
tended to  have  had  the  information  beforehand. 

Question.  But  most  of  the  information  is  furnished  by  officials  in  the  custom- 
house ? 

Answer.  Yes,  sir. 

Question.  You  never  knew  of  a  case  when  a  good  official  ever  received  any 
part  of  the  forfeiture  ? 

Answer.  I  do  not  know  of  one.  I  think  one  or  two  tried  to  get  it,  but  whether 
they  succeeded  or  not,  I  do  not  know.  I  know  of  a  police  officer  who  received 
something  as  an  informer. 

Question.  Do  you  know  of  the  employment  of  a  middle  man,  to  whom  those 
violating  the  revenue  laws  are  referred  1 

Answer.  Well,  they  would  simply  refer  them  either  to  Mr.  Dunning  (of  the 
firm  of  Dunning  &  O'Conner)  or  to  Mr.  Craig.  Those  are  the  two  principals 
who  attend  to  the  special  business,  because  a  lawyer  who  was  not  acquainted  with 
the  revenue  laws  might  advise  the  party  to  fight  the  case,  which  might  not  be 
for  the  interest  of  the  government. 

Question.  Do  you  know  why  it  is  that  the  Secretary  of  the  Treasury  in  his 
papers  shows  only  between  seventy  and  eighty  thousand  dollars  received  in 
four  years  ? 

Answer.  I  cannot  imagine  so  small  a  sum  as  that. 
Question.  YTou  did  not  include  the  salary  in  this  $150,000  ? 
Answer.  No,  sir. 

Question.  It  was  simply  from  fines  and  forfeitures  ? 

Answer.  Yes,  sir ;  I  have  always  thought  so;  that  would  make,  I  believe, 
$900,000  in  four  years. 

Question.  You  mean  what  the  government  gets  and  what  they  get  ? 

Answer.  Yes,  sir ;  there  must  be  over  a  hundred  thousand  dollars  received 
by  each ;  I  never  gave  my  attention,  except  to  the  time  that  I  was  there. 

Question.  You  do  not  mean  to  include  in  that  the  salaries  they  received  ? 

Answer.  Not  at  all,  only  the  fines  and  penalties ;  the  idea  that  it  does  not 
amount  to  $70,000  or  $80,000  in  four  year  is  all  nonsense. 


GOVERNMENT  CONTRACTS. 


13 


Question.  You  say  you  were  until  August  under  Mr.  Barney  ? 
Answer.  Yes,  sir. 

Question.  The  detection  of  the  smuggled  property  results  more  from  the  vigi- 
lance of  the  employes  of  the  custom-house  than  it  does  from  the  investigations 
of  the  collector,  the  naval  officer,  or  the  surveyor  ? 

Answer.  Yes,  sir  ;  they  have  nothing  to  do  with  it,  except  from  the  vigilance 
of  the  officers.  L.  C. 


John  W.  Hunter,  sworn: 

Question.  Who  is  with  you  in  the  custom-house  1 
Answer.  Samuel  Gr.  Ogden  is  auditor.    I  am  assistant  auditor. 
Question.  Does  any  part  of  the  matter  of  seizures  come  within  your  knowl- 
edge ? 

Answer.  The  distribution  of  the  money  after  it  goes  through  the  hands  of 
the  court. 

Question.  Suppose  a  party  has  been  defrauding  the  government  year  after 
year,  and  the  custom-house  officials  come  down  upon  him  suddenly  and  settle 
with  him ;  that  does  not  go  into  court  ? 

Answer.  No,  sir. 

Question.  But  the  money  comes  into  your  hands  the  same  as  if  it  went  into 
court  ? 

Answer.  Yes,  sir.  I  never  knew  of  a  case  where  money  has  been  received 
without  its  passing  through  our  office. 

Question.  What  is  the  annual  amount  of  proceeds  from  seizures,  whether  they 
are  paid  into  court  or  are  voluntarily  paid  for  the  purpose  of  preventing  a  suit  ? 

Answer.  We  could  show  by  the  books. 

Question.  Has  there  been  much  money  paid  out  to  informers  ? 
Answer.  Not  a  great  deal. 

Question.  Will  your  books  show  what  has  been  paid  out  to  informers  ? 
Answer.  Yes,  sir. 

Question.  Who  are  the  men  who  go  into  the  stores  upon  land  and  on  ships 
for  the  purpose  of  ascertaining  if  there  be  any  breach  of  the  revenue  law  1 

Answer.  Persons  connected  with  the  custom-house.  The  collector  may  assign 
anybody  to  that  duty. 

Question.  The  three  revenue  officers  personally  do  not  attend  to  it  ( 

Answer.  Xo,  sir.    I  suppose  they  go  if  it  becomes  necessary. 

Question.  The  ferreting  out  is  done  by  men  under  them  ? 

Answer.  Yes,  sir ;  men  in  their  employ  and  in  the  employ  of  the  government  ? 

Question.  Persons  who  do  this  ferreting  out  do  not  receive  any  part  ? 

Answer.  Xo,  sir. 

Question.  You  know  there  is  a  rule  that  a  government  employe  cannot  be  an 
informer  ? 

Answer.  Xo,  sir.    I  do  not  know  that  to  be  a  rule,  and  do  not  believe  in  it. 
The  employe  does  not  say  he  claims  to  be  an  informer. 
Question.  Why  not  1 
Answer.  He  endangers  his  position  ? 
Question.  How  so  ? 

Answer.  He  is  an  appointee  of  the  collector,  and  if  he  claims  his  portion  as 
an  informer  he  detracts  so  much  from  the  collector's  share.  He  would  be  liable 
to  be  removed  from  his  office  if  he  claimed  to  be  an  informer. 

Question.  Then  you  never  knew  of  a  government  employe,  even  though  he 
ferrets  out  the  whole  matter,  putting  himself  in  the  position  of  an  informer  so 
as  to  draw  anything  1 

Answer.  Xo,  sir. 

Question.  So  that  the  ferreting  out,  after  all,  and  the  saving  to  the  govern- 


14  GOVERNMENT  CONTRACTS. 

ment,  and  the  punishing  for  violations  of  the  revenue  law,  are  done  principally 
by  men  who  receive  no  share  of  the  proceeds  of  the  sale  ? 

Answer.  No  share,  unless  it  is  given  to  them  clandestinely. 

Question.  Then,  how  do  you  suppose  it  was  that,  when  Congivs<  passed  the 
law  prohibiting  the  revenue  officers  from  having  a  share  of  this  money,  seizures 
should  have  ceased  I 

Answer.  I  suppose  that  they  did  not  require  the  vigilance  on  the  part  of  the 
others  that  they  would  when  they  are  interested.  They  do  not  voluntarily  run 
into  danger  unless  they  are  profited  by  it.  I  think  the  officer  who  discovers  a 
fraud  should  be  allowed  to  come  in  as  an  informer.  It  does  not  detract  anything 
from  the  United  States. 

Question.  Under  the  law  he  may  become  an  informer  ? 

Answer.  I  think  Mr.  Woodbury  many  years  ago  decided  that  he  might. 

Question.  I  understood  that  Mr.  Hart  made  a  rule  that  no  government  em- 
ploye should  be  an  informer,  so,  I  suppose,  that  he  should  not  take  part  of  the 
government  plunder  ? 

Answer.  There  is  no  doubt  about  that. 

James  L.  Benedict,  sworn  : 

Question.  Do  you  reside  in  this  city  ? 
Answer.  Yes,  sir. 

Question.  Employed  in  the  custom-house  ? 

Answer.  I  am  deputy  surveyor. 

Question.  How  long  have  you  been  ] 

Answer.  Nine  years.    I  came  in  with  friend  Cochran. 

Question.  What  are  the  duties  of  your  office  principally;  what  have  you  in 
charge  ? 

Answer.  1  am  special  deputy.  1  have  general  charge  for  the  surveyor — act- 
ing surveyor  almost;  that  is  to  say,  when  the  surveyor  is  away  I  have  special 
warrant  to  act  as  surveyor. 

Question.  Which  of  the  revenue  officers  has  principal  charge  of  seizures  for 
violation  of  the  revenue  laws,  whether  they  are  upon  shipboard  or  upon  land  ? 

Answer.  The  seizures  are  always  made  by  the  officers,  under  the  direction  of 
the  surveyor. 

Question.  There  are  a  few  men  who  are  assigned  specially  to  that  business 
in  the  surveyor's  office  ? 

Answer.  There  are  three  or  four  men  who  are  specially  assigned  to  that  busi- 
ness and  a  variety  of  other  business — not  exclusively  to  that;  they  have  that 
business  especially  to  look  after,  although  all  the  other  officers  of  the  custom- 
house are  obliged  to  look  out  for  that  thing.  But  they  have  men  who  specially 
understand  the  business. 

Question.  Who  are  they? 

Answer.  Isaacs,  Brown,  Archer,  and  Graham  are  the  four  inspectors  who 
most  often  do  that ;  and  Deputy  Surveyor  Brown,  who  was  for  eight  years  in- 
spector, and  made  a  deputy  by  Mr.  Andrews.  Complaints  are  generally  passed 
over  from  the  surveyor  to  him,  and  they  make  the  seizure. 

Question.  Do  these  government  officials  who  make  the  seizures  receive  any 
portion  of  the  proceeds  ? 

Answer.  No,  sir;  unless  they  get  it  as  a  gratuity  from  the  office. 

Question.  Not  as  informers  ? 

Answer.  They  do  not  inform  of  all  the  seizures  that  are  made;  they  know 
nothing  about  it  in  nine  cases  out  of  ten,  except  the  seizures  are  made  from  pas- 
sengers on  steamers  and  except  as  they  are  directed  by  the  surveyor. 

Question.  Who  reports  to  the  surveyor  ? 

Answer.  I  cannot  tell  you  how  he  gets  his  information.  A  great  deal  of  in- 
formation is  sent  to  the  surveyor  by  anonymous  communication. 


GOVERNMENT  CONTRACTS. 


15 


Question.  At  all  events,  some  detections  are  made  by  government  officials, 
but  these  gentlemen  do  not  receive  any  portion  of  the  proceeds  of  the  sales  1 

Answer.  These  seizing  officers  1  Xo ;  it  is  a  part  of  their  official  business.  If 
the  appraiser  or  any  other  officer  discovers  a  fraud,  it  is  his  duty  to  communi- 
cate it. 

Question.  The  law  gives  one-fourth  to  the  informer '? 

Answer.  Yes,  sir;  but  I  have  always  understood  that  to  mean  an  outsider — 
one  not  connected  with  the  government  in  any  way. 

Question.  Was  the  rule  established  in  any  administration — it  is  acted  upon, 
at  all  events — that  they  cannot  be  informers  ? 

Answer.  It  has  always  been  acted  upon  since  I  have  been  in  the  custom- 
house.   I  have  never  heard  of  their  being  paid. 

Edward  M.  Marsh,  sworn  : 
Question.  Do  you  reside  in  this  city  I 
Answer.  Yes,  sir. 

Question.  Have  you  been  employed  in  the  custom-house  ? 
Answer.  Y^es,  sir ;  three  years  and  ten  months  ;  left  October  last. 
Question.  What  is  your  business  ? 
Answer.  Inspector. 

Question.  Can  you  state  anything  about  the  way  business  has  been  conducted 
in  the  custom-house  with  any  party  ? 

Answer.  Yes.  sir.  Brown,  Isaacs,  and  Archer  seem  to  be  the  privileged 
characters  ;  they  take  upon  themselves  full  authority  about  examining  baggage, 
and  they  examine  baggage  which  no  other  inspector  dare  undertake  to  examine  ; 
and,  in  fact,  they  passed  baggage  without  examining  which  no  other  inspector 
dares  to  pass ;  by  whose  instruction  nobody  knows  but  themselves,  and  in  a 
great  many  cases  they  receive  money  for  passing  baggage.  Mr.  Oldering  is  one 
of  the  men  through  whose  hands  money  has  been  passed  to  Mr.  Brown,  I  think. 

Wm.  C.  H.  Waddell,  sworn : 

Question.  Do  you  reside  in  this  city  1 
Answer.  Yes,  sir. 

Question.  Are  you  employed  in  the  custom-house  'I 

Answer.  Yes,  sir. 

Question.  In  what  capacity  ? 

Answer.  Special  clerk. 

Question.  How  long  have  you  been  there  ? 

Answer.  I  have  been  there  since  August,  1860. 

Question.  Been  special  clerk  all  the  time  ? 

Answer.  Yes,  sir. 

Question.  What  are  the  duties  of  your  office  ? 

Answer.  It  is  in  the  law  department  now  ;  that  is  the  term  attached  to  it,  and 
the  duties  I  have  are  connected  with  the  courts  and  the  custom-house  suits. 
Question.  Have  you  anything  to  do  with  seizures  1 
Answer.  Yes,  sir. 

Question.  You  have  been  in  that  business  since  you  have  been  there  l 
Answer.  Yes,  sir. 

Question.  Have  you  no  record  in  your  office  for  anything  except  what  goes 
to  the  United  States  courts  ? 

Answer.  Xo,  sir ;  except  those  cases  under  a  hundred  dollars. 

Question.  So  if  any  violation  of  the  law  is  compromised,  upon  which  no  suit 
is  brought,  you  have  no  record  of  it  and  know  nothing  about  it  ? 

Answer.  I  cannot  answer  that  way.  Any  part  of  the  record  by  me  is  so, 
but  of  late  on  the  books  there  are  several  instances  noted  where  it  did  not  go  up 


16 


GOVERNMENT  CONTRACTS. 


to  the  court.    Those  arc  made  by  Mr.  Bayard     He  said  he  did  not  think  it  was 
right  to  be  so.    The  naval  officer  and  the  deputy  naval  officer  say  it  can  pass 
so.    These  arc  cases  in  rem  and  cases  of  seizure  which  were  entered  on  the 
books.    1  do  not  know  the  cases  themselves. 
Question.  What  is  the  nature  of  the  cases  ? 

Answer.  Cases  of  seizure  where  the  amount  has  been  paid  in.  I  have  stated 
to  you  before  all  the  knowledge  I  had  of  the  amount  paid  into  court.  This 
is  paid  to  the  auditor  direct.  Now,  I  never  paid  any  money  to  the  auditor 
direct,  but  money  has  been  paid,  so  they  inform  me. 

Question.  Then  it  is  true  that  cases  are  settled  without  going  through  the 
court  ? 

Answer.  So  I  understand,  but  I  am  not  conversant  with  the  cases  myself. 
Mr.  Bayard  says  he  thinks  so. 

Question.  You  say.  that  has  been  done  of  late  ? 

Answer.  I  have  not  heard  of  it  over  a  few  months,  I  suppose. 

Question.  Previous  to  that  time  you  never  heard  anything  of  it  ? 

Answer.  No,  sir ;  in  no  instance  have  I  been  cognizant  of  the  particulars  in 
the  case  in  which  the  payment  went  directly  to  the  auditors,  but  I  have  no  doubt 
it  is  so. 

George  D.  Bayard,  sworn  : 

Question.  Where  do  you  reside  ? 

Answer.  In  Brooklyn. 

Question.  Employed  in  the  custom-house  ? 

Answei\  Yes,  sir ;  I  am  one  of  the  officers  of  the  seizure  bureau. 
Question.  How  long  have  you  been  in  that  bureau? 

Answer.  I  have  been  in  it  since  it  was  organized.  It  was  organized  by  Mr. 
Oargill  and  myself. 

Question.  What  is  your  duty? 

Answer.  Our  duty  is  to  have  control  of  all  the  seizure  records,  books,  &c. 

Question.  Have  you  not  heard  that  there  have  been  some  seizure  cases  which 
have  not  been  sent  to  the  office  of  the  district  attorney  ? 

Answer.  I  can  only  say  that  I  have  gone  through  the  forms  of  one  case,  up 

to  the  auditor's  department,  where  it  naturally  closes,  and  as  far  as  I  was  related 

to  it,  it  did  not  go  to  the  district  attorney's  office. 

##*##*##* 

Question.  What  was  done  with  the  goods  after  they  were  taken  ? 
Answer.  They  were  placed  in  the  custody  of  the  collector. 
Question.  Where  did  he  put  them  ? 
Answer.  In  the  safe. 

Question.  Who  was  collector  at  the  time  ? 

Answer.  Mr.  Barney.    I  think  it  was  in  October  last. 

Question.  This  case  you  think  did  not  go  to  the  district  attorney  ? 

Answer.  I  do  not  think  it  did. 

Question.  Have  you  stated  that  latterly  in  the  custom-house  seizure  cases 
sometimes  have  not  gone  to  the  district  attorney's  office  ? 

Answer.  Our  usual  practice  has  always  been  to  send  these  cases  up  to  the 
district  attorney,  but  in  this  case  of  Fillner,  I  understood  from  the  remarks 
which  were  made  to  me,  that  it  was  not  the  intention  of  the  parties  to  send  it 
to  the  office  of  the  United  States  district  attorney. 

Question.  Why  not  ? 

Answer.  I  do  not  know. 

Question.  Who  told  you  it  was  not  the  intention  ? 
Answer.  I  understood  it  from  remarks. 
Question.  Who  made  the  remarks  ? 
Answer.  Mr.  Dennison,  the  naval  officer. 


GOVERNMENT  CONTRACTS. 


17 


Question.  Did  he  say  why  it  was  not  to  be  sent  1 

Answer.  The  ground  of  it,  I  believe,  was  that  the  fees  of  the  clerks  and 
other  officers  were  so  great  as  to  consume  almost  altogether  the  amount  received 
from  the  goods,  and  it  would  be  no  object  to  send  where  such  extraordinary 
fees  and  assessments  were  made  upon  the  sums  which  might  be  received.  I  had 
a  conversation  with  the  deputy  naval  officer  on  that  subject,  contending  that, 
under  the  eighty-ninth  section  of  the  act  of  1799,  all  forfeitures  were  to  be  sent 
to  the  district  attorney's  office  and  in  all  cases.  That  was  my  view  of  the 
subject,  and  I  had  a  discussion  with  him  at  the  time,  understanding,  from  what 
I  had  heard,  that  a  different  practice  was  about  to  obtain. 

Question.  Now,  have  they  not  continued  to  do  so  from  that  time  down  ? 

Answer.  I  cannot  say  as  a  matter  of  knowledge. 

Question.  Have  you  not  understood  so  1 

Answer.  Yes,  sir;  not  directly  from  anybody,  but  the  practice  involves  certain 
forms  deviating  from  the  forms  of  the  old  practice,  and  hence,  without  any 
direct  communication  from  anybody,  by  the  mere  fact  that  forms  are  changed, 
I  know  there  has  been  a  change  in  the  practice. 

Question.  Did  you  ever  have  any  conversation  with  Mr.  Barney  or  Mr.  An- 
drews about  that  1 

Answer.  Yes,  sir;  I  have  had  a  conversation  with  both  of  them  about  it. 
Question.  What  did  Mr.  Barney  say  about  it  ? 
Answer.  He  disapproved  of  it. 
Question.  What  did  Mr.  Andrews  say  1 

Answer.  Well,  he  did  not  seem  to  have  any  decided  views  one  way  or  the 
other  in  all  the  conversations  I  had  with  him. 

Question.  Did  he  say  he  would  leave  it  to  Mr.  Dennison  ? 

Answer.  Mr.  Dennison  and  he  have  co-operated  in  the  conduct  and  manage- 
ment of  this  business. 

Question.  Did  you  or  Mr.  Cargill  ever  make  up  any  books  down  there  ? 

Answer.  We  have  a  record  of  all  the  seizures. 

Question.  Did  you  make  up  any  book  from  the  old  ones  ? 

Answer.  Yes,  sir;  two  or  three;  we  made  a  record  of  unsettled  cases. 

Question.  You  were  private  secretary  of  Mr.  Schell  ? 

Answer.  Yes,  sir ;  after  the  resignation  of  Mr.  Craig. 

Question.  Did  you  never  have  any  conversation  with  Mr.  Waddell  or  Mr. 
Cargill  ? 

Answer.  We  speculated  about  it. 

Question.  You  fixed  on  some  amount,  did  you  not  T 

Answer.  No,  sir. 

Question.  How  could  you  talk  about  the  amount  without  saying  some  amount  1 
Answer.  Because  our  conversation  was  not  conducted  with  any  idea  of  getting 
at  any  numerical  result. 

Question.  Did  you  say  nothing  about  the  amounts  received  1 

Answer.  Never ;  we  merely  spoke  of  the  offices  as  being  lucrative  ones. 

Question.  How  lucrative  did  you  think  they  were  ? 

Answer.  We  regarded  the  general  character  of  the  sources  of  that  income. 

Question.  You  could  not  possibly  stop  there ;  the  idea  would  necessarily 
come,  how  much  it  amounted  to. 

Answer.  We  never  made  any  calculation  as  to  the  amounts  received. 

Question.  Did  you  never  form  any  opinion  in  your  own  mind  as  to  how  much 
they  received  ? 

Answer.  Yes,  sir;  about  $30,000  a  year,  possibly,  over  and  above  their  sal- 
aries, being  the  proceeds  of  fines,  penalties,  and  forfeitures. 
Question.  What  did  you  base  that  opinion  upon  1 

Answer.  Upon  my  knowledge  of  the  business  of  the  office  in  which  I  was 
engaged. 

H.  Rep.  Com.  50  2 


18 


GOVERNMENT  CONTRACTS 


Question.  Based  upon  your  actual  business  and  records  in  the  office  ? 
Answer.  Yes,  sir. 

James  B.  Craig,  sworn  : 

Question.  You  say  that  the  collector  is  personally  responsible  for  a  wrongful 
seizure  ? 

Answer.  Yes,  sir. 

Question.  No  other  revenue  officer  1 

Answer.  The  seizure  is  generally  made  in  the  name  of  the  collector ;  the  other 
officers  give  him  a  bond  to  bear  their  proportion  of  the  damages. 

Question.  In  the  last  twelve  years  have  you  heard  that  the  collector  has  sus- 
tained any  damage  ? 

Answer.  I  have  known  of  the  matter  only  since  1853. 

Question.  Since  1853  have  you  heard  that  the  collector  has  incurred  any 
damage  by  his  seizures  ? 

Answer.  There  has  not,  in  that  time,  been  any  judgment  for  damages  obtained 
against  the  collector. 

Herman  Batzer,  sworn : 

#*#*##**# 

Question.  You  did  not  negotiate  this  thing  yourself,  except  through  your 
attorney  ? 

Answer.  I  did  not  ask  my  own  attorney  about  it.  I  did  not  want  to  have  a 
lawsuit  about  it.  Mr.  Dunning  being  the  attorney — I  was  advised  to  go  to  him 
by  the  men  who  came  into  my  store — I  tliought  I  would  go  there  and  have  it 
fixed. 

Question.  You  understood  he  was  interested  with  those  men  ? 
Answer.  He  did. not  speak  so.    I  should  judge  he  was;  and  then  I  do  not 
doubt  at  all  he  was  interested. 

Question.  They  were  very  anxious  to  have  you  go  to  Mr.  Dunning  ? 
Answer.  To  be  sure ;  they  immediately  took  me  around  to  Mr.  Dunning. 
Question.  Who  were  these  men  who  took  you  around  ? 

Answer.  One  was  Brown  and  the  other  was  Isaacs.  Of  course  these  were 
only  servants.  The  other  fellow,  Hart,  was  the  man  who  was  surveyor  at  the 
time. 

Question.  These  were  the  two  men  who  pounced  upon  you,  Brown  and  Isaacs? 

Answer.  They  were  left  in  the  store  to  watch  it.  They  took  hold  of  all  the 
books;  even  went  so  far  that  Dunning  said,  "Oh,  well,  you  had  better  settle 
for  $4,000."  I  said,  "I  cannot  pay  §4,000,  because  my  circumstances  would 
not  allow  me  to  do  it."  The  only  reason  I  paid  anything  is  because  I  did  not 
want  to  have  a  lawsuit  about  it.  "Well,"  he  said,  "  they  have  your  books,  and 
say  that  you  can  afford  to  pay  the  amount." 

Question.  It  was  Brown  and  Isaacs  who  wanted  you  to  go  to  Mr.  Dunning  ? 

Answer.  They  took  me  by  the  aim  and  said,  "  You  had  better  go  down  and 
see  him."    I  think  Isaacs  went  with  me  ;  went  to  show  me  there. 

Question.  Did  he  go  in  the  room  with  you  and  introduce  you  ? 

Answer.  One — Isaacs  or  Brown — did. 

Question.  What  did  he  say  when  he  brought  you  to  Mr.  Dunning  ? 
Answer.  He  introduced  me  very  friendly,  and  said  that  Mr.  Batzer  had  a  little 
trouble  and  wished  to  be  relieved. 

Question.  What  said  Mr.  Dunning  then? 

Answer.  He  talked  very  smart  about  it;  of  course  he  never  appeared  to  me 
or  wanted  to  show  that  he  was  any  way  interested,  and,  of  course,  he  went  with 
me  and  tried  to  play  my  counsel  before  the  others — went  with  me  several  days. 

Question.  Where  did  he  call? 

Answer.  At  the  custom-house,  to  see  Mr.  Hart.    And  they  taxed  me  accord- 


GOVERNMENT  CONTRACTS. 


19 


ing  to  the  goods  I  had  in  store ;  they  found  all  the  goods  I  had,  and  taxed  me 
according  to  the  goods  I  had.  I  was  asked  how  many  goods  I  had.  I  told 
them  I  had  such  and  such  goods.  They  then  found  out  I  had  not  given  up  all 
the  goods  for  them  to  take  hold  of,  because  the  goods  were  not  in  the  invoices. 
They  found  it  out  and  then  they  say:  "now  you  should  not  do  so,  because  we 
can  tax  you  for  a  good  deal  more  if  we  choose  to." 

Question.  They  took  the  goods  that  were  not  mentioned  in  the  invoices  they 
complained  of? 

Answer.  They  took  the  whole;  all  I  had. 

Question.  Had  you  goods  in  your  store  that  did  not  come  in  the  invoices  ? 
Answer.  To  be  sure  I  had. 

Isaac  Hamburger  sworn: 

Question.  Do  you  live  in  this  city? 
Answer.  Yes,  sir- 
Question.  What  is  your  business  1 
Answer.  Importer  of  fancy  goods. 

Question.  Have  the  custom-house  officials  made  any  seizures  of  your  goods  ? 
Answer.  Yes,  sir. 
Question.  When  1 

Answer.  The  latter  part  of  J anuary . 

Question.  What  did  they  seize  ? 

Answer.  The  whole  stock  of  goods. 

Question.  Did  they  the  first  day  speak  about  settling  1 

Answer.  The  first  day  they  told  me  to  come  around  and  see  the  naval  officer. 

Question.  Did  you  go  ] 

Answer.  Yes,  sir;  I  went  with  a  lawyer. 

Question.  Who  did  you  take  with  you  ? 

Answer.  Mr.  Dunning. 

Question.  How  came  you  to  go  to  Mr.  Dunning  ] 
Answer.  They  told  me  to  go  to  Mr.  Dimning. 
Question.  What  was  the  point  ? 

Answer.  That  the  duty,  in  some  instances,  had  not  been  paid  on  the  inland 
freight  in  Europe,  and,  in  some  instances,  the  duties  had  been  paid  on  those 
charges.  I  consulted  about  half  a  dozen  lawyers  on  that  point.  In  some  in- 
stances these  charges  were  not  put  on  the  bill,  because  Ave  were  under  the  im- 
pression, at  least  so  far  as  we  knew  the  revenue  law,  it  was  not  any  part  to  have 
duty  paid  on,  and  I  believe  in  some  instances  it  is  not  done.  At  any  rate,  those 
lawyers  told  me  that,  in  this  case,  when  the  neglect  of  such  a  revenue  law  is  not 
intentional,  they  could  only  raise  the  duty. 

Question.  Was  this  done  with  the  intention  of  evading  the  revenue  law  ? 

Answer.  No,  sir. 

Question.  You  say  that  the  opinion  was  that  where  it  was  not  intentionally 
done  there  could  be  no  seizure. 
Answer.  So  I  understood. 

Question.  Did  they  first  fix  a  price  in  money  which  they  wanted  you  to  pay  ? 
Answer.  As  far  as  I  could  learn  the  negotiation  was  something  near  $5,000. 
The  proposition  was  not  made  to  me,  but  my  lawyer. 
Question.  What  did  you  say  about  that  1 
Answer.  I  would  not  pay  that. 
Question.  What  then  was  done  ? 

Answer.  So  things  went  on  for  four  or  five  days,  going  to  and  fro,  and  finally 
it  interfered  a  good  deal  with  our  business.  They  had  charge  of  the  store  day 
and  night.  We  could  not  ship  any  goods,  and  had  no  books  to  do  anything. 
Considering  all  this  and  not  wishing  to  have  the  trouble  of  a  lawsuit,  and  con- 


20  GOVERNMENT  CONTRACTS. 

eideriii£  (although  we  could,  as  I  was  informed,  recover  our  goods  by  giving 
security,  &c.)  that  it  would  injure  us  a  good  deal,  even  if  we  could  gain. 

Question.  Who  did  you  pay  that  money  to? 

Answer.  It  was  paid  by  Mr.  Dunning  to  the  naval  officer. 

Question.  Were  you  present? 

Answer.  Yes,  sir. 

Question.  You  went  to  the  naval  officer  and  paid  it  there  ? 
Answer.  Yes,  sir. 

Question.  When  was  this  money  paid  ? 
Answer.  It  was  on  the  1st  of  March — on  Saturday. 
Question.  Did  you  get  a  receipt  ? 
Answer.  No,  sir. 

Question.  Did  you  ask  for  a  receipt  ? 

Answer.  Mr.  Dunning  told  me  beforehand  that  I  could  not  get  a  receipt. 
Question.  How  came  he  to  tell  you  that  ? 

Answer.  I  told  him  in  paying  the  money  I  would  like  to  get  a  receipt,  and 
see  that  things  were  done  straight.  He  said  it  was  all  right.  It  was  paid  to  the 
officer  there,  and  I  understood  it  was  all  right. 

Question.  When  you  spoke  to  Mr.  Dunning  about  getting  a  receipt,  he  said 
you  could  not  get  a  receipt  ? 

Answer.  Yes,  sir ;  he  said  it  was  not  customary  to  get  a  receipt  in  paying 
such  money  into  the  treasury. 

Question.  Were  these  goods  in  the  store  that  they  found  fault  about  ? 

Answer.  No,  sir. 

Question.  And  at  the  time  you  had  no  goods  that  were  on  the  invoice  that 
they  found  fault  with  ? 

Answer.  There  was  no  particular  claim  raised. 

Question.  There  was  no  particular  lot  of  goods  they  were  after  ? 

Answer.  No,  sir ;  and  the  goods  mentioned  in  the  invoice  they  found  fault 
about  was  not  in  the  store. 

Question.  Do  you  remember  who  recommended  you  to  Mr.  Dunning  ? 

Answer.  Mr.  Isaacs. 

Robert  Lee,  sworn: 

*##*#**#* 

Question.  What  was  his  name  ? 
Answer.  Thomas  Brown. 

Question.  Do  you  know  of  any  other  case  where  he  passed  baggage  without 
examining  it. 

Answer.  I  saw  him  pass  baggage  several  times  without  examining  it. 
Question.  Did  you  see  Isaacs  do  the  same  ? 
Answer.  Yes,  sir. 

Question.  Did  you  ever  see  whether  any  money  was  paid  by  the  passengers 
to  these  men  for  passing  their  baggage  without  examination. 

Answer.  No,  sir ;  but  I  have  heard  rumors  that  they  would  go  to  the  stores 
and  get  presents. 

Question.  You  never  saw  anything  of  it  yourself  ? 

Answer.  No,  sir;  a  great  many  passengers  would  come  and  inquire  for  Mr. 
Isaacs  or  Mr.  Brown. 

Question.  Would  they  inquire  specially  for  them  ? 
Answer.  Yes,  sir. 

Question.  When  there  were  other  custom-house  officers  there  ? 
Answer.  Yes,  sir ;  they  would  inquire  specially  for  them  to  save  the  trouble, 
I  suppose,  of  opening  their  trunks. 


GOVERNMENT  CONTRACTS. 


21 


Question.  The  law  requires  trunks  and  everything  to  be  opened  and  exam- 
ined? 

Answer.  Yes,  sir. 

Henry  A.  Warts,  sworn  : 

Question.  What  department  were  you  in? 

Answer.  I  was  formerly  inspector,  recently  in  the  warehouse  department, 
termed  warehouse  clerk,  in  charge  of  the  store  at  5  Whitehall  street  some  three 
years. 

Question.  Where  goods  were  stored  under  general  order  ? 

Answer.  A  bonded  warehouse.  I  was  an  inspector  in  1853  and  1854.  Mr. 
Isaacs,  that  now  holds  a  position  in  a  department,  was  on  special  duty  with  me 
some  five  months.  We  made  a  seizure  at  Jersey  City,  consisting  of  some  gold 
watch  movements  and  a  lot  of  laces,  and  ladies'  apparel,  that  is,  under  clothes, 
chemisetts  and  sleeves,  and  Honiton  lace  and  things  of  that  character.  We  re- 
covered these  goods  in  a  hotel  in  Jersey  City.  They  came  from  the  steamer 
Alps,  and  Mr.  Isaacs  and  Captain  Rogers,  who  were  storekeepers,  appropriated 
a  large  lot  to  their  own  use. 

Question.  They  appropriated  a  good  deal  to  their  own  use. 

Answer.  Mr.  Isaacs  and  myself  seized  these  goods  in  Jersey  City,  and  had 
them  in  Rogers's  office.  Mr.  Rogers,  Mr.  Isaacs  and  myself  were  the  only  per- 
sons present  at  the  time.  They  were  very  nice  things  to  look  at,  and  having  a 
large  family,  Mr.  Isaacs  made  the  remark  to  me :  Said  he,  "Harry,  you  had 
better  take  some  of  these ;  they  will  be  very  good  for  your  daughters."  I  said 
I  have  no  right  to  these  things.  The  property  will  be  sold  for  a  small  price  by 
the  government,  and  I  said  I  should  attend  the  sale  and  purchase  there.  Mr. 
Isaacs  and  Mr.  Rogers  appropriated  a  number  of  articles  to  their  own  use. 
The  balance  they  took  to  the  collector. 

P.  J.  JOACHIMSON. 

•  *»#•**#*• 

Question.  Are  they  still  doing  that? 

Answer.  I  do  not  know,  for  the  custom-house,  so  far  as  the  bar  is  concerned, 
is  a  close  corporation,  Mr.  Craig  or  Mr.  Dunning  being  generally  the  counsel  for 
the  other  side.  I  have  known  instances  where  my  clients  reported  to  me  that 
they  were  directed  by  the  custom-house  officers  to  go  to  Mr.  Dunning  or  to  Mr. 
Craig.  *  *  *  I  know  one  man  from  Chicago  came  to  me  in  a  seizure  case, 
where  a  number  of  diamond  rings  had  been  taken  off  his  wife's  fingers.  They 
were  appraised  to  the  amount  of  $2,000  or  more.  They  charged  he  was  smug- 
gling, and  while  I  was  negotiating  he  was  actually  taken  by  a  custom-house 
officer  to  Mr.  Dunning.  *  *  *  The  man  came  to  consult  with  me,  and  the 
next  time  he  came  and  saw  me  with  his  friend  he  showed  me  Mr.  Dunning's 
direction  in  Mr.  Isaac's  handwriting,  given  him  by  Mr.  Isaacs,  telling  him  to  go 
to  that  man  and  he  would  settle  it.  They  pretend  that  they  will  take  the  men 
•to  Mr.  O'Conner,  the  greatest  lawyer  in  New  York. 

Question.  What  is  the  effect  of  the  present  system  of  collecting  the  revenues, 
or  rather  of  enforcing  the  revenue  laws  ? 

Answer.  The  present  system  is  a  very  unsatisfactory  one.    It  protects  neither 

the  rights  of  the  importer.    It  makes  the  whole  thing  a  matter  of  dollars  and 

cents  as  between  the  revenue  officers  and  the  importers,  with  this  disadvantage 

to  the  importer  :  that  no  merchant,  for  the  sake  of  his  credit,  can  afford  to  have 

it  known  that  he  has  any  difficulties  with  the  custom-house.    It  ruins  him. 
###*###### 

Question.  Is  it  not  as  easy,  in  the  honest  discharge  of  duty,  to  prevent  smug- 
gling in  this  port  as  it  is  to  prevent  slavers  going  out  of  this  port  % 


22 


GOVERNMENT  CONTRACTS. 


Answer.  It  is  more  so  if  the  intent  and  spirit  of  the  law  is  fairly  carried  out. 

Question.  The  fact  that  subordinates  accept  presents  from  merchants  and 
others,  and  the  fact  that  the  revenue  officers  will  compromise  for  less  than  the 
appraised  value,  would  have  a  tendency  to  encourage  smuggling? 

Answer.  It  does.  The  fact  that  a  man  is  not  liable  to  personal  penalty  has 
a  tendency  to  make  the  thing  a  matter  of  dollars  and  cents  and  mere  specula- 
tion. 

Question.  What  is  the  efTect  of  this  system  of  administering  the  revenue 
laws  on  the  part  of  the  revenue  officers  upon  the  honest  merchant  doing  busi- 
ness kere? 

Answer.  The  merchant  who  desires  no  trouble  with  the  custom-house  will 
have  invoices  at  higher  rates  than  the  market  value,  having  his  private  invoices 
and  selling  at  lower  rates.  ####*# 

Question.  When  goods  are  seized  in  the  store  of  the  merchant,  though  im- 
properly by  the  revenue  officers  or  their  subordinates,  what  remedy  has  the 
merchant  ? 

Answer.  None  whatever.    He  must  await  the  decision  of  the  suit. 
Question.  Then  the  merchant  is  entirely  at  the  mercy  of  the  collector  and  his 
subordinates  ? 

Answer.  Yes,  sir;  and  not  until  after  the  suit  against  the  goods  has  been  de- 
termined has  he  any  rights  whatever.  *  *  *  *  * 

Question.  I  understand  you  to  say  that  in  many  cases  the  merchant,  to  save 
his  credit  and  reputation  at  home,  and  with  the  houses  abroad,  would  settle  by 
paying  money  when  he  felt  that  there  was  no  just  claim  against  him  ? 

Answer.  Yes,  sir ;  and  it  is  the  constant  advice  given. 

Question.  Is  there  an  additional  reason  to  save  embarrassment  of  their  busi- 
ness by  the  revenue  officers? 

Answer.  Certainly.  Men  who  have  difficulty  with  the  custom-house  find 
themselves  embarrassed  in  all  their  subsequent  transactions  by  delay,  &c. 

Samuel  G-.  Ogden,  auditor  in  custom-house,  sworn  : 

Question.  Where  money  is  paid  voluntarily  do  you  give  receipts  1 
Answer.  The  collector  has  given  receipts,  but  where  he  has  done  it  he  has 
required  a  consent  from  the  counsel  of  the  parties,  because  otherwise  there  might 
be  a  claim  upon  him  for  having  extorted  the  money  or  something  of  that  kind. 

Question.  Is  it  proper  for  him  to  give  a  receipt  where  money  has  been  paid 
voluntarily  ? 

Answer.  Yes,  sir ;  and  this  consent  of  the  parties  shows  that  the  thing  it 
voluntary  upon  their  part ;  that  it  is  not  exacted  ;  that  it  is  not  levying  black 
?nail. 

Horatio  F.  Averill,  sworn: 

Question.  How  came  you  to  go  to  Mr.  Dunning  ? 

Answer.  Isaac  suggested  that  Mr.  Dunning  was  familiar  with  the  practice. 
Question.  Was  he  anxious  you  should  go  there  ? 
Answer.  Rather ;  he  seemed  to  be. 

Simon  Mendelsox,  sworn : 
Question.  Where  do  you  reside  ? 
Answer.  In  this  city  ? 

Question.  Have  you  had  any  business  connexion  with  the  New  York  custom- 
house ? 

Answer.  Yes,  sir;  they  have  seized  my  goods. 
Question.  When  was  this? 


GOVERNMENT  CONTRACTS. 


23 


Answer.  Quite  recently ;  in  December  last.    One  day  they  came  to  my  store ; 
the  office  is  quite  small,  but  there  were  eleven  custom-house  officers  in  it.  *  *  * 
Question.  Who  were  present  ? 

Answer.  There  was  of  the  chief  authorities  Mr.  Dennison,  the  naval  officer; 
there  was  Mr.  Andrews,  he  was  there  only  for  a  moment ;  there  was  Mr.  Brown, 
chief,  I  believe,  of  subordinates,  and  Isaacs  and  Archer. 

Question.  Who  said  it  was  implied  in  the  warrant  to  seize  your  books  1 

Answer.  The  man  who  read  the  paper,  I  believe  it  was  Mr.  Brown. 

Question.  Was  there  any  such  authority  in  the  warrant  ? 

Answer.  No,  sir ;  only  to  seize  my  goods. 

Question.  Did  they  seize  on  the  books  ? 

Answer.  They  had ;  I  was  not  in  when  they  came ;  when  I  came  the  clerk  told 
me.  The  first  thing  they  did  was  to  jump  to  the  safe  and  take  out  the  books  and 
handed  them  to  one  man,  who  went  down  stairs  and  away  with  them.  While  I  was 
there  they  opened  every  drawer,  and  wanted  me  to  open  a  private  book  having 
a  lock  on  it.  I  said  I  have  nothing  to  fear ;  I  can  open  it  if  I  want  to,  but  I 
said  I  do  not  like  to  see  such  proceedings ;  I  do  not  think  you  have  a  right  to 
come  into  my  office ;  but  as  they  were  going  to  wrench  the  lock  off  I  opened  it. 

Question.  What  was  the  book  that  had  the  lock  on  ] 

Answer.  It  was  a  private  ledger,  which  had  no  reference  to  the  business. 

Question.  They  took  that  ? 

Answer.  Yes,  sir. 

Question.  Did  they  take  your  bank  book? 
Answer.  No,  sir. 

Question.  Did  they  take  your  private  papers  ? 

Answer.  They  made  a  selection. 
■  Question.  What  then  did  they  do  ? 

Answer.  They  said  the  next  morning  I  should  go  to  the  custom-house,  I 
believe  to  the  surveyor's  ;  and  they  told  me  to  go  to  the  naval  officer.  I  went 
there,  and  I  said,  "  Mr.  Brown  was  yesterday  in  my  store,  will  you  now  tell  me 
what  the  object  of  the  seizure  was,  and  what  are  your  charges  against  me  ?  " 
They  said,  "you  are  charged  with  having  made  fraudulent  entries,  with  having 
defrauded  the  United  States  of  duties."  I  said  I  am  not  aware  of  it.  Where 
is  it  1  They  said  it  would  take  some  time  to  make  it  out.  They  would  in  a 
few  days  show  me  the  charge.    It  took  some  days  :  I  forget  how  many. 

Question.  They  could  not  tell  you  right  away  ] 

Answer.  They  could  tell  the  nature  of  the  charge  but  they  could  not  specify. 
They  said  they  must  first  look  at  the  books  ;  they  must  make  it  up,  in  fact,  and 
that  would  take  some  time ;  and,  in  fact,  they  said  they  wanted  a  translator  to 
translate  French  letters,  &c.  Some  time  afterwards  I  went  up  again  and  asked 
them  if  they  were  ready  to  tell  me  the  charges  against  me.  I  wanted  to  know 
the  specification.  They  showed  me  a  paper  about  eighteen  inches  long,  on 
which  they  made  out,  as  the  sum  and  substance,  that  I  had  not  paid  the  duties 
on  $1,500  worth  of  goods.  These  $1,500  were  made  up  by  a  dozen  or  more 
importations. 

Question.  Different  invoices  ? 

Answer.  Yes,  sir. 

Question.  At  different  times  1 

Answer.  Yes,  sir ;  a  dozen  or  more  invoices,  imported  at  different  times,  which 
they  found  did  not  quite  correspond  with  figures  they  found  in  the  books.  I 
have  paid  the  United  States  about  840,000  duties.  Do  you  think,  I  asked  the 
naval  officer,  that,  for  the  sake  of  saving  a  paltry  $200,  that  I  would  go  to  de- 
frauding the  United  States,  when  the  duties  actually  paid  are  of  that  amount  ? 
They  said  that  was  all  very  well,  but  they  would  proceed  against  me.  Well,  I 
told  them  they  might.    They  had  taken  away  all  the  goods  I  had  in  the  store, 


24 


GOVERNMENT  CONTRACTS. 


still  the  specifications  which  they  made  did  not  include  but  one  single  case  of 
what  they  found  in  the  store. 

Question.  After  they  took  away  your  books  what  did  they  do  with  your  goods 
in  the  store  ? 

Answer.  They  put  officers  in  charge. 

Question.  What  then  ? 

Answer.  They  next  said  they  would  proceed  against  me. 
Question.  What  did  they  do  with  your  goods  ? 
Answer.  Afterwards  they  took  the  goods  away. 
Question.  All  the  goods  in  your  store  ? 
Answer.  Yes,  sir. 

Question.  Where  did  they  take  them  ? 

Answer.    Corner  of  New  street  and  Exchange  place. 

Question.  What  was  your  business  ? 

Answer.  Leather,  calf  skins ;  they  took  even  domestic  goods  I  had  in  the 
store. 

Question.  Even  goods  never  imported  ? 
Answer.  Yes,  sir. 

Question.  How  many  of  the  goods  they  took  away  were  mentioned  in  the 
invoices  which  they  claimed  to  be  fraudulent  ? 

Answer.  Only  one  single  case.  I  am  sorry  I  do  not  know  the  amount,  but 
was  not  $500  out  of  $20,000  or  $16,000. 

Question.  You  had  about  $16,000. 

Answer.  Yes,  sir. 

Question.  There  was  not  over  $500  mentioned  in  the  fraudulent  invoices,  as 
they  claimed. 

Answer.  Not  over  $500. 

Question.  Did  you  remonstrate  with  them  on  that  point  ? 

Answer.  Yes,  sir.  I  said,  you  have  taken  away  all  my  goods  ;  in  the  speci- 
fication there  are  but  one  or  two  cases  that  can  come  under  this.  They  said, 
Oh,  well,  that  is  not  so. 

Question.  You  know  it  was  so  ? 

Answer.  I  know  that  it  was  so. 

Question.  Did  your  books  show  as  you  have  stated? 

Answer.  They  showed  me  the  specification  in  which  they  said  so  and  so. 
There  is  a  difference  of  $50  on  this  invoice ;  on  this  invoice  is  a  difference  of 
$20  ;  on  this  invoice  a  difference  of  a  $100. 

Question.  How  did  they  make  out  this  difference? 

Answer.  By  difference  in  charges  they  made  out,  in  fact,  in  a  dozen  invoices 
that  there  was  an  undervaluation  of  $1,500.  On  a  single  importation  that 
would  be  a  very  trifle. 

Question.  How  long  a  time  have  these  computations  been  running  through? 

Answer.  I  have  been  in  business  in  New  York  since  the  month  of  August, 
1860. 

Question.  They  claimed  a  little  on  one  invoice  and  a  little  on  another. 

Answer.  Yes,  sir ;  and  in  that  way.  You  know  the  charges  on  goods  are 
considered  as  belonging  to  them,  such  as  charges  for  packing  and  shipping, 
charges  on  the  other  side,  for  instance,  from  the  place  of  manufacture  to  the 
place  of  shipping. 

Question.  Was  that  the  matter  they  went  into? 

Answer.  They  did  not  go  into  details. 

Question.  Did  they  charge  that  the  goods  were  undervalued,  or  that  the  in- 
voices did  not  have  the  charges  on  the  other  side  ? 

Answer.  They  did  not  go  into  details.  They  said  I  had  defrauded  the  United 
States  on  duties  on  $1,500. 


GOVERNMENT  CONTRACTS. 


25 


Question.  You  did  not  understand  whether  it  was  an  undervaluation  or  an 
omission  to  put  on  the  charges  on  the  other  side  ? 
Answer.  They  said  it  was  undervaluation. 

Question.  They  took  those  goods  as  stated,  and  of  all  those  goods  there  was 
but  one  case  covered  by  the  invoices  ? 

Answer.  Yes,  sir.  They  took  also  an  importation,  I  forget  how  many  cases, 
which  had  come  in  at  that  time. 

Question.  They  took  those  from  the  ship  ? 

Answer.  Yes,  sir. 

Question.  Did  they  charge  that  those  were  undervalued  1 
Answer.  Yes,  sir;  all  was  included  in  the  $1,500;  in  fact,  they  wanted  to 
make  out  that,  perhaps,  on  $200,000  the  duties  had  not  been  paid  on  $1,500. 
Question.  Had  those  goods  been  undervalued,  in  your  judgment? 
Answer.  Not  a  particle. 

Question.  In  your  judgment,  you  had  paid  the  full  and  legal  amount  of  duty 
to  the  United  States  ? 

Answer.  Yes,  sir.  I  also  said,  if  you  consider  me  dishonest  it  is  very  easy 
to  get  at  the  true  value  of  the  article  ;  there  are  plenty  of  people  that  deal  in  it. 
I  also  told  them  they  should  compare  my  invoices  with  the  invoices  of  others 
in  the  same  business.  I  was  answered,  we  don't  believe  in  invoices  ;  in  other 
words,  all  the  world  are  rogues. 

Question.  They  took  away  your  goods  and  you  got  their  charges  against  you. 
What  else  was  done  % 

Answer.  I  told  them  to  proceed  against  me.  The  next  step  to  proceed  against 
me  was  to  have  those  goods  valued,  and  then  I  would  have  to  give  bail,  two 
sureties,  each  for  double  the  amount  of  the  goods. 

Question.  That  would  have  been  over  $30,000 ? 

Answer.  Yes,  sir;  I  would  have  to  give  8100,000  security. 

Question.  Did  you  consult  a  lawyer? 

Answer.  Yes,  sir. 

Question.  Who? 

Answer.  Mr.  Dunning. 

Question.  How  came  you  to  consult  Mr.  Dunning  ? 
Answer.  He  was  recommended. 
Question.  By  whom  ? 

Answer.  I  know  it  was  one  of  them ;  but,  surely,  I  could  not  tell  the  name. 
There  were  three  different  people  who  took  me  aside  and  told  me  I  should  em- 
ploy this  man  and  that  man. 

Question.  Who  took  you  aside  ;  these  custom-house  officers  ? 

Answer.  Yes,  sir. 

Question.  Who  did  they  tell  you  to  employ  ? 
Answer.  Mr.  so  and  so. 
Question.  Who  did  they  name  ? 

Answer.  Mr.  Craig ;  one  said  Mr.  Craig  or  Mr.  Dunning. 
Question.  Did  they  name  any  others  that  you  remember  ] 
Answer.  No,  sir. 

Question.  Who  named  them  to  you  1 

Answer.  That  I  could  not  be  sure  of. 

Question.  What  did  they  say  when  they  took  you  aside  ? 

Answer.  All  said  this  matter  will  be  blown  over  soon.  Of  course,  I  looked 
rather  glum.  I  saw  this  was  the  commencement  of  ruiu,  which  it  really  might 
have  proved.  They  said  go  to  this  man.  As  I  heard  that  Mr.  Dunning  was 
partner  of  Charles  O'Connor,  as  I  knew  that,  or  got  to  know  that,  I  went  to  Mr. 
Dunning. 

Question.  When  I  first  asked  you  who  first  recommended  you  to  go  there, 
you  hesitated  to  answer. 


26 


GOVERNMENT  CONTRACTS. 


Answer.  Yes,  sir. 

Question.  Why  should  you  hesitate  to  answer  ? 

Answer.  I  do  not  know  who  told  me  so,  and  when  I  have  employed  a  lawyer 
I  do  not  like  to  bring  him  into  any  trouble.  I  do  not  know  that  he  has  done 
any  wrong  in  it. 

Question.  They  advised  you  to  see  Mr.  Dunning,  and  you  went  there  ? 

Answer.  Yes,  sir. 

Question.  What  did  you  do  then  ? 

Answer.  Mr.  Dunning  went  at  it  to  get  the  matter  in  shape.  I  thought  if  I 
proceeded  against  them,  or  let  them  proceed  against  me,  (I  threatened  to  sue 
them  if  they  did  not  sue  me  quick,)  I  would  get  my  books  back,  so  I  could 
proceed  with  business ;  but  I  never  could  get  my  books,  still  less  could  I  get 
my  goods ;  it  was  so  clear  and  patent  that  they  wanted  to  force  me  into  some- 
thing. 

Question.  They  were  not  willing  to  let  you  have  your  books  ? 

Answer.  No,  sir ;  they  said  they  wanted  them.  When  I  wanted  any  satis- 
faction, they  said,  in  a  little  while ;  and  the  little  while  ran  on,  and  ran  on ;  in 
fact,  I  would  have  been  ruined  if  I  bad  not  come  to  something.  They  would 
have  kept  my  goods  on  the  strength  of  what  they  called  a  seizure.  They 
could  proceed  against  but  one  case.  They  might  as  well  have  given  back  the 
others ;  but  there  was  nothing  of  the  kind  done.  Times  were  not  easy  at  the 
time,  and  it  was  not  easy  to  find  securities  for  $60,000  each ;  besides,  I  did  not 
like  to  ask  friends  to  go  security.  Moreover,  if  I  had  brought  those  securities 
I  was  told  it  was  their  option  to  reject  them. 

Question.  Who  told  you  that? 

Answer.  Mr.  Dunning.  And  then  I  should  have  to  leave  them  the  goods ; 
and  I  was  told,  and  I  knew  also,  that  a  suit  with  the  custom-house  might  take 
a  couple  of  years. 

Question.  Who  told  you  that? 

Answer.  Mr.  Dunning ;  and  I  believe  it  is  so.  I  saw  it  shown  among  mer- 
chants that,  if  you  have  a  suit  with  the  United  States  to  recover  anything 
from  the  United  States,  it  requires  a  couple  of  years  to  come  to  a  decision.  I 
saw  if  I  could  not  get  my  books  or  goods,  if  I  let  the  thing  run  on,  I  would 
be  a  ruined  man,  because  the  business  season  was  approaching.  I  was  then 
told  the  matter  could  be  compromised. 

Question.  Who  told  you  that? 

Answer.  Mr.  Dunning. 

Question.  What  then? 

Answer.  I  had  strenuously  opposed  any  compromise,  until  I  came  to  the  full 
conviction  that,  if  I  did  not  do  such  a  thing,  I  could  not  get  my  books  and 
could  not  import  anything;  in  fact,  that  I  was  entirely  under  their  power. 
Finally  I  consented  to  compromise. 

Question.  Had  Mr.  Dunning  advised  a  compromise  before  this  time? 

Answer.  No,  sir ;  Mr.  Dunning  did  not. 

Question.  Who  did  recommend  a  compromise  ? 

Answer.  He  told  me  that  they  wanted  a  compromise ;  he  told  me  such  a 
thing  could  be  compromised. 

Question.  He  reminded  you  why  it  had  better  be  done — how  long  it  would 
take? 

Answer.  Yes,  sir ;  he  told  me  the  chances ;  he  did  not  advise  it.    At  last 
they  got  me  so  that  I  could  not  go  on  with  my  business. 
Question.  What  was  then  done  ? 
Answer  It  was  compromised. 
Question.  What  did  they  first  ask  you  ? 

Answer.  I  told  Mr.  Dunning  I  wanted  to  know  what  they  would  let  me  off 
for.    The  answer  was,  it  was  to  correspond  to  the  amount  of  importation — the 


GOVERNMENT  CONTRACTS. 


27 


amount  of  goods  seized ;  it  was  something  like  $10,000  or  $12,000.  I  was 
given  to  understand  that.  I  never  saw  them  directly.  Mr.  Dunning  told  me 
so  ;  that  was  their  estimate. 

Question.  They  wanted  $10,000  when  their  only  charge  against  you  was  the 
deficiency  of  duty  on  $1,500? 

Answer.  Yes,  sir. 

Question.  What  then  ? 

Answer.  They  took  $5,000.  I  finally  told  them  I  would  not  mind  a  couple 
of  thousand  dollars  to  get  rid  of  them ;  finally  they  said  $6,000  or  $7,000 ; 
finally  they  took  $5,000.    I  considered  it  an  extortion,  and  nothing  else. 

Question.  When  they  took  these  goods  in  your  store,  did  they  have  them 
appraised  ? 

Answer.  No,  sir ;  they  were  going  to  have  them  appraised ;  they  were  going 
to  proceed  against  me ;  they  were  going  to  do  everything. 

Wm.  W.  Thomas,  a  custom-house  broker,  sworn : 

Question.  Do  you  know  whether  respectable  merchants,  for  fear  of  difficulty 
with  custom-house  officials  here,  also  have  their  goods  charged  higher  than  they 
are  required  to  do  in  their  invoices  ? 

Answer.  Yes,  sir ;  I  have  had  a  case  within  the  last  two  months,  where  I  had 
a  large  invoice  of  tobacco.  I  was  ordered  by  the  importer  to  enter  it,  making 
an  addition,  at  the  time  of  the  entry,  of,  I  think,  15  per  cent.,  for  the  purpose 
of  avoiding  any  trouble — the  party  at  the  same  time  representing  that  the 
tobacco  was  invoiced  at  the  correct  value ;  but,  in  consequence  of  difficulties 
which  other  parties  had  had,  or  which  he  feared  rather  than  have  any  trouble, 
he  would  pay  the  duty  on  the  additional  15  per  cent. 

Question.  Was  this  an  honorable  house  ? 

Answer.  A  house  of  very  high  standing.  *  *  *  I  make  it  a  point  in 
my  business,  whenever  this  question  is  submitted  to  me,  to  advise  the  importer, 
in  all  cases  where  he  has  any  doubt  in  the  matter,  to  make  a  heavy  addition,  so 
as  to  avoid  any  difficulty,  even  when  the  invoice  price  is  fair  and  honest. 

Question.  Is  that  frequently  done  ? 

Answer.  Yes,  sir,  it  is ;  it  is  of  very  common  occurrence. 
Question.  With  our  best  importers  ? 

Answer.  Yes,  sir;  and  on  articles  of  their  own  purchase,  where  they  think 
another  party  may  have  paid  more  for  them. 

Question.  Where  they  purchase  goods  for  themselves,  pay  the  price  in  the 
foreign  market,  they  make  an  addition  beyond  that1? 

Answer.  Yes,  sir;  for  instance,  two  parties  go  abroad;  one  buys  heavily  with 
cash  in  hand,  having  an  advantage  over  an  order  sent  from  New  York.  He 
buys  a  large  quantity  of  goods.  In  such  cases  as  that  cautious  men  are  in  the 
habit  of  adding  to  their  entries  to  prevent  difficulties.  I  do  not  suppose  that 
during  the  last  two  years  I  have  scarcely  entered  any  article  of  brandy  without 
making  an  addition  beyond  the  price  for  which  it  was  purchased.    *    *  * 

Question.  What  class  of  houses  have  generally  had  their  goods  seized? 

Answer.  Generally  the  houses  of  foreigners. 

Question.  Have  you  any  reason  in  your  mind  why  they  should  seize  foreign 
houses  rather  than  others? 

Answer.  They  are  less  prepared  with  friends  to  assist  them,  and  there  is  great 
delicacy  in  foreign  houses  as  to  asking  other  houses  to  bond  their  goods.  Foreign 
houses  are  pretty  cautious  about  signing  their  names  to  bonds. 

Question.  If  I  understand  you  right,  as  to  the  machinery  of  the  custom-house, 
the  importer  is  entirely  in  their  hands  as  to  the  appraisement  of  the  goods  ? 

Answer.  Entirely,  sir;  he  has  no  voice  at  all  in  the  matter.    *    *  * 

Question.  Can  efficient  officers,  to  a  great  extent,  prevent  smuggling  in  this 
port? 


28 


GOVERNMENT  CONTRACTS. 


Answer.  I  think  they  can  prevent  it  entirely.  I  think  that  whenever  any 
smuggling  is  committed  it  is  owing  to  the  negligence  of  the  officers  of  the  port, 
to  a  great  extent. 

Question.  Is  it  not  as  easy,  in  your  judgment,  to  prevent  smuggling  as  to  pre- 
vent fitting  out  slavers  in  this  port? 

Answer.  Quite  as  easy ;  and  with  regard  to  undervaluation  there  is  no  diffi- 
culty whatever,  that  the  board  of  appraisers,  properly  constituted,  should  prevent 
anything  of  that  kind. 

Question.  Is  there  any  necessity,  in  an  efficient  and  honest  discharge  of  duty 
on  the  part  of  the  custom-house  officers,  that  invoices  should  run  from  month  to 
month  and  from  year  to  year  without  undervaluation  being  detected  ? 

Answer.  No,  sir. 

Question.  Ought  it  not  to  be  detected  at  the  time  the  goods  are  present  to 
answer  ? 

Answer.  Yes,  sir. 

Question.  Can  you  find  any  excuse  for  the  custom-house  officers,  after  the 
lapse  of  six  months  or  a  year,  to  then  pretend  to  discover  that  there  has  been  a 
fraud? 

Answer.  No,  sir ;  if  the  proper  appointments  are  made  it  is  impossible  for 
goods  to  pass  undervalued,  except  at  a  slight  percentage. 

Question.  It  would  not  then  be  possible  for  the  goods  to  get  from  the  ware- 
houses into  the  merchants'  stores  at  an  undervaluation? 

Answer.  No,  sir;  there  might  be  a  slight  undervaluation;  there  might  be  a 
difference  of  opinion  sometimes  from  five  to  ten  per  cent. 

Question.  If  these  men  understand  their  business  they  will  detect  the  under 
valuation  at  the  time  the  goods  are  in  port? 

Answer.  Yes,  sir. 

Question.  Are  not  these  men  as  capable  of  knowing  the  undervaluation  at  the 
time  they  are  first  entered  into  the  port  as  years  afterwards? 

Answer.  Yes,  sir;  they  ought  to  know  them  at  the  time,  because  the  valuation 
is  to  be  at  the  time  of  the  shipment.  Here  are,  for  instance,  half  a  dozen  men 
importing  goods  of  the  same  kind ;  out  of  this  half  dozen  they  know  there  are 
several  correct  men,  and  they  can  take  those  as  standards  and  test  the  value  by 
these  standards. 

THE  LABOR  CONTRACT. 

The  next  subject  of  inquiry  was,  what  is  generally  known  as  the 
labor  contract  for  hauling  goods  from  ships  and  bonded  warehouses  to 
the  appraiser's  store,  and  all  the  labor  of  handling  while  there,  made 
in  August,  1859,  to  extend  three  years  from  the  5th  day  of  September 
following. 

This  contract  was  made  by  collector  Schell,  approved  by  Howell 
Cobb,  then  Secretary  of  the  Treasury,  on  the  one  part,  and  W.  N.  Mc- 
Intire  and  his  associates  on  the  other. 

This  labor  was  formerly  employed  by  the  collector,  and  it  was 
claimed  much  was  to  be  saved  to  the  government  by  this  contract. 
Many  democrats  during  Buchanan's  administration  opposed  it;  and  in 
the  36th  Congress  a  committee  was  appointed  to  examine  in  relation 
to  the  same  ;  but  the  attempt  to  annul  it  was  unsuccessful.  At  the 
commencement  of  this  administration,  Mr.  Mclntire  and  his  associ- 
ates were  fearful  that  it  would  not  be  sanctioned,  if  in  their  hands — 
they  being  democrats  ;  and  they  sold  or  pretended  to  sell  their  in- 
terest in  the  contract  to  Simon  Stevens  and  Luther  B.  Wyman . 


GOVERNMENT  CONTRACTS. 


29 


On  the  5th  day  of  February,  1862,  I  introduced  the  following, 
which  was  unanimously  adopted  in  the  House  : 

Resolved,  That  the  Secretary  of  the  Treasury  be  directed  to  furnish  this 
House  with  a  copy  of  the  contract  made  by  him  or  his  department  for  hand- 
ling, opening,  assorting,  and  general  delivery  of  foreign  goods  in  the  city  of 
New  York,  usually  called  the  labor  contract  or  general  orders  contract ;  and 
shall  also  inform  this  House  whether  the  said  labor  is  now  done  by  the  original 
parties  to  said  contract,  or  whether  said  contract  has  been  assigned ;  if  so,  to 
whom,  and  for  what  consideration.  Also,  who  are  the  owners  of  the  ware- 
houses where  said  goods  are  stored,  and  what  rents  are  paid  for  their  use. 

This  contract  was  profitable,  and  party  machinery  must  be  brought 
into  play,  if  possible,  to  save  it. 

Mr.  Stevens  was  one  of  the  parties  who  advanced,  in  fact,  but 
little  of  the  money,  and  Mr.  Wyman  the  other,  who  seems  to  have 
not  been  known  in  the  transaction  at  all,  further  than  using  his  name, 
while  William  Allen  Butler,  then  and  now  law  partner  of  Collector 
Barney,  was  the  lawyer  of  the  transaction,  and  who  received  Mr. 
Wyman' s  share  of  the  contract.  He  says  "  that  the  nominal  consid- 
eration for  this  transfer  was  $20,000.  I  understood  that,  to  a  consid- 
erable extent,  an  interest  of  the  original  contractors  was  retained." 
Speaking  of  Mr.  Wyman,  he  says,  "  my  knowledge  of  him  led  to  his 
being  selected,  with  the  consent  of  all  parties,  to  act  as  attorney  in 
conjunction  with  Mr.  Stevens,  and  to  take  the  transfer  jointly  with 
him." 

So  everything  was  supposed  to  be  quietly  arranged  in  the  law  office 
of  Barney  &  Co.  to  weld  that  contract  on  this  administration,  but  the 
whole  matter  was  so  apparent  that  when  the  attention  of  Secretary 
Chase  was  called  to  it  he  refused  to  renew  it. 

A  very  significant  fact  is  the  overshadowing  influence  which  the 
contractors  had  over  Collector  Barney  in  removing  and  appointing  to 
office.  Whether  the  mere  fact  that  the  business  was  transacted  in 
his  office,  or  more  substantial  reasons  weighed,  the  public  must  judge 
from  the  circumstances. 

The  country  is  benefited  by  the  breaking  up  of  this  contract,  for 
Mr.  Barney  swears  it  will  probably  save  to  the  treasury  $37,000  annu- 
ally. I  have  no  doubt  that  a  labor  contract  let  to  the  lowest  bidder 
would  save  an  additional  $37,000. 

The  original  contractors  had  also  a  large  portion  of  the  general 
order  business  on  the  North  river,  in  fact,  the  most  lucrative  part  of 
that  monopoly.  It  will  be  remembered  that  the  collector  has  control 
and  can  designate  those  stores  which  shall  be  allowed  to  store  goods 
on  general  order.  It  was  not  only  suggested  to  the  original  firm  that 
there  was  danger  that  a  republican  administration  would  fail  to  renew 
this  contract  in  democratic  hands,  but  it  was  intimated  that  the  gen- 
eral order  ^business  would  be  taken  from  them  unless  other  parties 
were  taken  in  the  contract.  Mr.  Barney  had  control  of  the  general 
orders,  and  the  contractors  must  have  been  fully  satisfied  that  some 
one  had  authority  to  speak  for  Mr.  Barney;  so,  rather  than  loose  the 
whole,  they  surrendered  a  part. 


30 


GOVERNMENT  CONTRACTS. 


The  following  is  a  portion  of  Mr.  Stevens's  testimony,  taken 
December  22  : 

Question.  Were  you,  or  were  you  not,  interested  in  what  is  called 
the  labor  contract  at  the  public  stores? 
Answer.  I  was. 

Question.  From  what  time  to  what  time? 

Answer.  From  the  11th  of  May,  l&Gl,  until  about  the  6th  or  7th  of 
September,  1802. 

Question.  Who  else  was  interested  with  you  in  the  contract  during 
that  time? 

Answer.  Mr.  Luther  B.  Wyman. 

Question.  Any  other  person? 

Answer.  1  know  of  no  other  person  directly  interested. 
Question.  Any  other  person  indirectly? 

Answer.  I  represented  one  half  the  contract  and  Luther  B.  Wyman 
represented  the  other  half. 

Question.  Be  kind  enough  to  tell  us  whether  anybody  else  had  any 
direct  or  indirect  interest  in  it? 

Answer.  I  represented  one  half  of  it;  it  was  in  my  name;  I  bought 
it  and  paid  for  it.    *  *  *  *  *  * 

Question.  Did  anybody  have  any  indirect  interest  in  any  portion  of 
the  contract  except  what  you  represented? 

Answer.  I  have  only  my  suppositions. 

Question.  What  do  you  know  about  that  matter? 

Answer.  That  I  was  requested  to  pay  one  half  of  the  profits,  what- 
ever they  might  be,  over  and  above  expenses,  to  William  Allen  But- 
ler. Mr.  Butler  stated  that  he  was  the  attorney  for  Mr.  Wyman. 
Payments  were  so  made  and  receipt  therefor  given  by  William  Allen 
Butler,  as  attorney  for  the  first  two  payments.  Subsequently  receipts 
were  given  by  him  for  money  paid  to  him,  signed  in  initial,  "  W.  A. 
B."  Then  and  from  that  day  all  payments  were  made  to  him  and 
receipts  given  by  him,  and  so  signed,  with  the  exception  of  some  few 
payments  which  were  made  to  George  W.  Parsons,  who  sometimes 
receipted  for  them,  simply  "  G.  W.  P.;"  on  some  occasions  tkW.  A. 
B.  per  G.  W.  P.,"  and  sometimes  "  G.  W.  P.  for  W.  A.  B." 

Question.  Who  is  this  William  Allen  Butler? 

Answer.  He  is  of  the  law  firm  of  Barney,  Butler  &  Parsons. 

Question.  Who  is  this  Mr.  Parsons  ? 

Answer.  He  is  of  the  firm  of  Barney,  Butler  &  Parsons. 

Question.  Who  is  the  Barney  of  that  firm? 

Answer.  Hiram  Barney,  collector  of  the  port  of  New  York. 

Question.  Is  that  firm  now  in  business  here? 

Answer.  Yes,  sir. 

Question.  Did  you  pay  any  of  these  proceeds  to  Mr.  Wyman  him- 
self? 

Answer.  No,  sir. 

Question.  Did  Mr.  Wyman  himself  direct  you  where  to  pay  those 
proceeds? 

Answer.  He  did  not. 


GOVERNMENT  CONTRACTS. 


31 


Question.  Did  you  have  any  authority  directly  from  Mr.  Wyman 
to  pay  them  as  you  did  ? 

Answer.  Simply  on  the  day  of  the  execution  of  the  papers  Mr. 
William  Allen  Butler  said,  in  the  presence  of  Mr.  Wyman,  this  in 
purport:  "  As  I  am  the  attorney  for  Mr.  Wyman,  the  net  proceeds  of 
this  contract  will  be  paid  to  me." 

Question.  Did  Mr.  Wyman  assent  to  that? 

Answer.  Mr.  Wyman  nodded  assent. 

Question.  You  took  no  paper  to  protect  you  for  such  payments  ? 

Answer.  I  did  not,  nor  have  1  any  such  papers. 

Question.  Do  you  know,  from  Mr.  Wyman  or  otherwise,  whether 
Mr.  Wyman  had  any  interest  in  this  contract  beyond  the  use  of  his 
name  ? 

Answer.  Mr.  Wyman  has  on  several  occasions  stated  to  me  that  he  had 
no  interest,  direct  or  indirect,  in  the  contract  otherivise  than  the  use  of 
his  name. 

Question.  Did  he  tell  you  who  had  the  interest  represented  by  his 
name  ? 

Answer.  He  said  he  knew  of  nobody  in  this  matter  except  William 
Allen  Butler,  who  claimed  to  act  as  attorney  for  the  parties  actually  in 
interest. 

On  the  3d  day  of  January  Mr.  Butler  was  sworn.  I  was  not 
present  at  his  examination.  I  say  this  in  justice  to  myself,  for 
it  seems  almost  impossible  that  his  examination  should  have  been 
concluded  and  he  not  asked  who  were  the  real  parties  in  interest 
whom  he  represented  when  that  was  one  of  the  subjects  of  investi- 
gation. Only  three  questions  were  put  to  Mr.  Butler.  The  first  as 
to  his  residence  and  business  ;  the  second,  "have  you  read  the  tes- 
timony taken  before  this  committee  touching  the  transfer  of  the  labor 
contract?"  and  the  third,  "have  you  any  statement  to  make  touching 
your  connexion  with  that  transfer  of  interest  under  the  so-called  labor 
contract  V*  Mark  the  gentleness  of  the  interrogatories.  Was  it  be- 
cause he  was  law  partner  of  Mr.  Barney  ?  I  know  not.  Among  other 
things,  to  the  last  question,  he  says:  "But  whatever  information  I 
had  on  the  subject  was  derived  in  the  course  of  my  professional  em- 
ployment, and  I  acquired  no  positive  knowledge  about  it.  Funds 
were  placed  in  my  hands  by  parties  in  interest."  He  evidently  did 
not  mean  Stevens  or  Wyman  ;  he  nowhere  states  who  were  the  parties 
in  interest,  and  most  strange  of  all,  he  was  not  asked. 

The  connexion  of  the  general  orders  with  this  contract  shows 
irresistibly  who  were  behind  the  scene,  because  they  there  worked  in 
happy  unison. 

The  following  evidence  will  establish  the  positions  above  stated: 
Henry  A.  Cargill,  sworn: 

Question.  Do  you  know  about  the  general  order  business  ? 
Answer.  It  was  not  under  my  supervision.    I  had  charge  of  the  labor  contract 
then.    I  had  charge  of  12  Broad  street.    I  was  deputy  collector  of  that  division. 
Question.  Were  you  there  before  that  labor  contract  was  given  out? 
Answer.  Yes,  sir;  I  had  charge  of  the  labor  contract  then. 
Question.  This  contract  was  held  by  Bixby,  Mclntire  &  Co.? 


32 


GOVERNMENT  CONTRACTS. 


Answer.  Yes,  sir ;  Mr.  Craig  was  one  of  the  partners. 
Question.  They  held  that  until  what  time? 

Answer.  I  do  not  know  the  exact  month,  but  it  must  have  been  until  Mr. 
Barney  had  been  there  three  or  four  months. 
Question.  How  came  they  to  sell  out? 

Answer.  They  we?e  compelled  to  sell  out ;  I  heard  that  they  could  not  keep 
the  general  order  store,  that  it  would  be  given  to  some  one  else  if  they  did  not 
sell  out  this  contract.  They  sold  out,  and  got  $21,000  cash  for  the  labor  con- 
tract. They  got  a  check  from  Barney,  Parsons  &  Co.  for  a  part  of  the  amount. 
I  never  saw  the  contract,  and  know  of  it  simply  from  what  Mr.  Stevens  and 
Mr.  Mclntire  told  me.  I  asked  them  what  the  contract  was  worth  to  them, 
and  they  told  me  about  $10,000  each,  but  now  it  appears  there  was  so  little 
doing,  and  so  little  cartage,  they  would  make  at  least  $60,000  a  year  after  this. 
As  long  as  there  was  no  business  doing  they  cut  down  the  quantity  of  labor. 

Question.  Who  told  you  this? 

Answer.  The  conversation  happened  between  Mclntire  and  myself,  and 
Simon  Stevens,  who  bought  the  contract  out.  He  said  it  was  a  little  thing,  and 
that  it  was  all  right  at  headquarters.  I  asked  him  who  was  in  it,  and  he  said  it 
was  all  right.  He  said  to  me,  you  are  all  perfectly  straight,  and  you  need  give 
yourselves  no  uneasiness.  I  had  offered  to  resign.  After  he  came  he  wrote  and 
said  he  was  not  ready  to  accept  my  resignation.  I  had  charge  of  12  Broad 
street,  and  he  told  me  he  wanted  me  to  work  the  contract.  He  wanted  me  to  post 
him  up.  I  was  perfectly  safe  there.  He  told  me  it  was  a  little  ring ;  it  had 
been  all  settled  up,  and  the  same  intimation  was  given  me  by  Mr.  Mclntire.  I 
understood  from  Mr.  Mclntyre  that  he  could  not  hold  it  any  longer,  that  he  was 
compelled  to  sell  it,  that  the  contract  would  be  broken  up,  and  he  was  compelled 
to  sell  out. 

Question.  At  this  time  Mather  &  Co.  had  the  store  for  the  general  orders  ? 
Answer.  They  had  the  general  order  store  for  all  the  goods  sent  to  the  east 
part  of  the  city. 

Question.  Have  they  still  possession  of  them  ? 
Answer.  They  had  to  sell  them  out  with  the  contract. 

Question.  They  could  have  held  their  labor  contract,  and  all  that  Mr.  Barney 
could  have  taken  away  was  the  general  order  ? 

Answer.  They  could  have  taken  away  the  general  order,  but  they  could  have 
held  the  contract,  except  that  they  might  have  made  a  row  about  it  and  broken 
it  up. 

Question.  Why  was  not  this  labor  contract  good  ? 

Answer.  They  could  only  have  broken  it  up  by  bringing  it  before  Congress, 
and  they  thought  best  to  sell  out  because  of  intimations  made  to  them. 
Question.  Do  you  know  who  negotiated  with  Mclntire  &  Co.? 
Answer.  I  heard,  but  do  not  remember. 
Question.  What  interest  had  Mr.  Stevens? 
Answer.  I  do  not  know. 

Question.  Do  you  know  whether  any  percentage  is  paid  for  general  orders  ? 

Answer.  I  never  heard  of  it ;  whether  there  is  anything  of  that  kind  going 
on  I  have  no  idea ;  they  used  to  say  that  Waldron  made  a  good  deal  of  money ; 
he  was  poor  when  he  went  in  there,  but  he  went  out  worth  seventy  or  eighty 
thousand  dollars? 

Question.  What  is  the  effect  or  result  of  allowing  revenue  officers  to  have  a 
part  of  the  property  or  money  resulting  from  the  sale  of  seized  goods  ? 

Answer.  Well,  sir,  it  leads  to  a  grasping  disposition  on  the  part  of  the  collec- 
tor, the  naval  officer,  and  the  surveyor,  to  get  a  large  sum  of  money;  and  very 
frequently  great  injustice  to  the  parties. 

Question.  Is  it  necessary  to  prevent  smuggling  that  a  part  of  the  proceeds 
should  be  distributed  among  the  revenue  officers? 

Answer.  Not  at  all,  if  men  do  their  duty  for  which  they  are  paid. 


GOVERNMENT  CONTRACTS. 


33 


Question.  In  your  opinion  would  not  the  laws  be  better  administered,  and 
justice  done  better  to  all,  by  not  allowing  the  revenue  officers  to  share  in  the 
seized  goods  ? 

Answer.  I  do  not  think  there  would  be  as  much  vigilance,  perhaps;  it  is  all 
done  to  get  this  large  sum  of  money;  it  is  not  done  to  stop  frauds  as  much  as 
to  get  this  large  sum  of  money. 

Question.  But  the  real  watchfulness  is  by  the  men  who  receive  no  share  in 
this  forfeiture  1 

Answer.  Yes,  sir. 

Cyril  H.  Brack  ett,  sworn  : 
Question.  Where  do  you  now  reside  I 
Answer.  In  Brooklyn. 

Question.  Have  you  been  employed  in  the  custom-house  1  and  if  so,  state 
how  long,  and  when. 

Answer.  My  office  is  115  Nassau  street,  New  York  city.  A  clerkship  was 
created,  to  which  I  was  appointed  by  Secretary  Guthrie,  in  July,  1856.  1  re- 
mained employed  in  the  custom-house  until  October,  1861 — first  for  a  little  over 
three  years,  in  the  custom-house  proper,  fourth  division.  I  was  then  transferred 
to  the  sixth  division,  to  a  place  as  a  clerk  in  the  United  States  public  store, 
(then  at  12  Broad  street.)  I  went  to  12  Broad  street  in  October,  1859;  was 
there  for  two  years.  I  became,  while  in  the  United  States  store,  familiar  with 
the  duties  of  the  place  I  kept  and  the  general  duties  of  those  surrounding  me. 
About  two  months  previous  to  my  going  there  the  contract  for  doing  the  work 
and  labor  of  the  United  States  store  was  made  by  Mr.  Schell,  who  represented 
Howell  Cobb,  Secretary  of  the  Treasury,  with  John  0.  Mather  and  his  asso- 
ciates. Very  soon  after  I  went  to  the  United  States  store  as  clerk  I  became 
satisfied  that  the  contract  was  a  bad  one  for  the  government — pernicious  in  its 
influence.  I  took  occasion  to  say  so  to  my  friends  and  other  parties.  I  also 
wrote  two  or  three  articles  for  the  Brooklyn  and  Kentucky  papers,  calling  atten- 
tion to  it,  and  expressing  a  hope  that  as  the  Secretary  of  the  Treasury  had,  at 
that  time,  retained  the  right  of  rescinding  it,  he  would  do  so.  Soon  afterwards, 
to  wit,  in  November,  I  was  called  upon  by  John  C.  Mather  at  my  desk,  who 
gave  me  to  understand  that  he  had  perused  my  articles  and  heard  of  my  speak- 
ing against  the  contract.  Upon  that  occasion  he  stated  to  me  that  if  this  was 
persisted  in  I  should  be  removed  from  my  position  as  clerk.  I  paid  but  little 
attention  to  the  views  he  expressed,  and  continued  consistently  the  line  of  con- 
duct that  I  had  adopted,  writing  articles  afterward.  About  that  time  Mather 
stated  to  me  that  his  influence  with  Mr.  Schell,  the  collector,  and  Secretary 
Cobb,  was  pre-eminent ;  that  the  contract  would  be  continued,  whether  advan- 
tageous to  the  service  or  not.  During  my  clerkship  in  the  United  States  public 
store  John  Dempsey,  sworn  clerk,  appointed  by  the  collector,  paid  by  the  United 
States  government  constantly,  each  week  made  the  pay-roll  for  the  contractors. 
He  was  employed  about  half  his  time  doing  that,  and  the  rest  of  his  time  did 
little.  Mr.  Baum,  a  clerk  in  the  storekeeper's  office,  called  the  roll  for  the  con- 
tractors in  the  morning,  and  did  other  duties  for  them.  In  the  spring  of  1861 
the  United  States  store  was  removed  from  12  Broad  street  to  56  Broadway,  and 
some  other  numbers.  The  acting  storekeeper,  Munson  Gray,  chalked  out  or 
measured  out  a  place  for  the  storekeeper's  office  in  the  building.  A  large  number 
of  offices  were  made;  the  offices  for  the  appraisers  were  formed.  The  offices 
for  all  the  examiners  were  also  formed;  but,  as  I  remarked,  Major  Cray  marked 
out  a  place,  on  the  floor,  for  the  United  States  storekeeper's  office.  He  soon 
found  that  place  was  taken  possession  of  by  the  contractors.  It  was  finished  in 
a  gorgeous  manner  for  an  office  in  that  locality,  at  the  expense  of  the  govern- 
ment. It  has  been  constantly  occupied  by  the  contractors,  who  are  Maiher, 
H.  Rep.  Com.  50  3 


34 


GOV KKN MENT  CONTRACTS. 


Bixhy  cV  Stevens.  The  expense  of  finishing  the  office  must  have  been  $400  at 
least.  That  office  they  have  since  kept,  rent  free,  and  the  United  States  store- 
keeper's office  was  kept  in  a  shingled,  dilapidated  room,  from  spring  until  Oc- 
tober. During  my  clerkship  in  that  office,  in  the  spring  of  1861,  Mr.  Mather 
claimed  to  have  sold  out  a  large  share  of  his  interest  to  one  Simon  Stevens,  a 
man  by  the  name  of  Wyman,  and  other  parties  not  remembered  by  inc.  He, 
however,  remained  during  the  entire  summer,  closely  attending  to  the  locality, 
being  there  frequently,  and  is  there  now.  Stevens,  who  also  claimed  to  be  one 
of  the  contractors,  was  also  constantly  there.  Both  Mather  and  Stevens  claimed 
to  have  a  controlling  influence  over  the  clerks  in  the  office,  and  to  be  capable  of 
removing  or  placing  them  at  pleasure. 

Question.  Has  Mr.  Mather  said  anything  to  you  since  Mr.  Barney  has  been 
collector  about  finding  fault  with  this  contract,  and  what  he  could  do  with  Mr. 
Barney  against  you  ? 

Answer.  Yes,  sir.  Mr..John  C.  Mather  stated  to  me  in  September,  1861, 
that  he  had  no  difficulty  in  managing  Collector  Barney ;  that  he  could  have  me 
removed  any  day  ;  that  he  managed  Mr.  Barney  very  easily — there  was  no  diffi- 
culty in  the  world  about  it;  to  use  his  words,  that  he  was  easily  mesmerized; 
that  he  had' got  along  passably  well  with  the  late  collector,  Schell,  but  some- 
times Schell  would  be  obstinate  and  exhibit  Dutch  resistancy,  but  that  with  Bar- 
ney there  was  no  difficulty  in  the  world,  and  claimed  to  have  with  him  Mr. 
James  Humphrey,  late  law  partner  of  Mr.  Barney,  the  three  being  bosom  friends. 

Question.  What  was  the  application  he  made  of  this  ? 

Answer.  To  show  me  how  readily  he  could  demolish  me. 

Question.  Did  he  make  some  allusion  to  your  opposition  to  this  contract  ? 

Answer.  Yes,  sir ;  he  said  in  that  matter  that  I  had  not  spoken  well  of  the 
contract,  and  that  such  remarks  would  cause  my  removal. 

Question.  How  long  were  you  a  clerk  in  the  public  store  department  1 

Answer.  Two  years. 

Question.  Were  you  there  before  this  contract  was  made  ? 
Answer.  About  two  months  after  it  was  made. 

Question.  Did  you  know  anything  about  the  expenses  which  these  men  were 
subjected  to  every  week  in  carrying  on  this  contract  ? 

Answer.  Some  weeks  I  did  and  some  weeks  I  did  not ;  my  remembrance  is 
that  I  have  seen  pay-rolls  footing  up  less  than  $500  per  week.  \ 

Question.  Is  the  amount  paid  by  the  government  for  having  this  labor  done 
there  vastly  more  than  the  necessary  expenses  of  having  the  labor  done  ? 

Answer.  The  work  was  offered  to  be  done  at  sixty  per  cent,  after  it  was 
given  to  them,  by  William  M.  Tweed,  and  he  offered  to  give  real  estate  security ; 
he  is  a  responsible  man.  He  was  anxious  for  the  contract.  Since  that  time,  I 
learn  that  half  a  dozen  individuals  of  responsibility  have  offered  to  do  the  work 
and  take  the  contract  for  fifty  per  cent. 

Question.  Did  Mather  give  you  to  understand  how  he  obtained  this  contract? 

Answer.  On  one  occasion  he  said  he  obtained  this  contract  from  his  long  per- 
sonal intimacy  and  subserviency  to  Howell  Cobb. 

Question.  In  what  respect — where  had  this  intimacy  taken  place,  and  what 
relations  had  they  sustained  of  business  or  otherwise  ? 

Answer.  He  was  not  as  explicit  in  reference  to  that  as  he  might  have  been, 
but  he  said  he  had  known  Mr.  Cobb  intimately ;  and  he  had  always  sustained 
his  pretensions  privately  for  the  presidency. 

Question.  Did  he  speak  anything  about  his  relations  to  railroads  in  Georgia? 

Answer.  He  said  he  had  relations  with  Cobb  in  Georgia  in  reference  to 
business  matters,  and  intimated  on  one  occasion  that  Mr.  Cobb  had  been  his 
lawyer  in  connexion  with  contracts  there  on  railroads,  but  he  was  not  minute. 

Question.  He  did  not  give  you  any  detail  of  their  railroad  operations  in 
Georgia  ? 


GOVERNMENT  CONTRACTS. 


35 


Answer.  Not  anything  of  the  kind.  He  said,  upon  two  occasions,  that  Cobb 
and  he  were  as  intimate  as  two  brothers.  Mather  stated  to  me,  while  he  was 
canvassing  the  third  congressional  district,  in  the  autumn  of  1860,  that  he  would 
certainly  be  elected  if  patronage  and  money  could  elect  him.  Upon  a  suggestion 
of  mine  that  there  were  prejudices  against  his  patronage  and  contract,  he  said 
he  knew  there  were,  but  he  controlled  the  channel  of  obtaining  labor  in  the 
custom-house  and  stores  ;  that  that  was  a  very  great  political  power.  He  gave 
me  that  fact  as  a  reason  why  he  should  be  a  democratic  candidate  for  the  House 
of  Representatives.  After  he  took  the  held  as  a  candidate  nominated  by  a  por- 
tion of  the  unterrified  democracy,  he  did  put  men  on  for  different  purposes  in 
addition  to  the  usual  number.  These  men  were  very  promptly  displaced ;  as 
soon  as  he  left  the  ring,  they  were  kicked  out  very  quick. 

Question.  Did  he  say  through  what  particular  influences — did  he  say  any- 
thing to  you  about  Mr.  Barney? 

Answer.  He  said,  in  reference  to  that  point,  that  he  was  enabled  to  do  that 
from  his  intimacy  with  the  law  firm  of  Butler,  Barney  &  Humphrey,  from  his 
entire  control  of  some  of  the  members  of  that  concern. 

Question.  Did  he  say,  at  any  time,  that  this  was  forced  upon  him  as  a  matter 
of  necessity  by  Barney  or  his  friends,  so  that  some  one  else  should  be  interested  ? 

Answer.  Yes,  sir ;  he  upon  one  occasion  stated  to  me  that  this  arrangement — 
this  change — was  forced  upon  him  by  the  necessities  of  his  position,  more 
especially  by  the  collector. 

Question.  Did  he  explain  why? 

Answer.  Only  that  they  wished  to  make  some  money  out  of  it. 
Question.  Did  he  say  in  this  conversation  how  he  was  approached  in  this 
matter  ? 

Answer.  No ;  he  did  not  go  into  minute  particulars,  but  he  said,  upon  these 
occasions,  that  he  had  himself  put  the  project  through,  knowing  the  necessity 
of  it. 

Question.  Did  he  say  it  was  necessary  in  order  to  save  this  contract,  to  pre- 
vent its  being  broken  up  by  the  Secretary  of  the  Treasury? 

Answer.  Yes,  sir.    He  said  it  was  necessary  to  take  in  republican  material. 
Question.  In  order  to  save  the  contract  ? 
Answer.  Yes,  sir. 

Question.  He  expressed  fear — thought  certainly  that  the  contract  would  be 
overthrown  if  he  did  not  do  this  ? 

Answer.  Yes,  sir ;  he  did  in  every  instance — a  half  a  dozen  instances — 
always  give  that  as  a  reason  why  he  had  taken  this  man  into  the  contract,  but 
claimed  the  lion's  share  himself  after  all. 

Question.  You  just  spoke  of  the  collector  being  connected  with  the  matter  ? 

Answer.  Yes,  sir,  through  Mr.  Humphrey. 

Question.  Since  this  contract  has  been  obtained  and  other  parties  taken  in, 
have  Mr.  Mather  and  Mr.  Bixby  both  been  interested  about  the  storehouse  ? 
Answer.  Mr.  Mather  more  so  than  he  was  previously. 
Question.  How  about  Bixby  ? 

Answer.  He  was  during  the  summer  at  the  United  States  store  more  fre- 
quently than  he  was  previously. 
Question.  Who  of  the  new  firm  ? 
Answer.  Mr.  Stevens. 
Question.  Mr.  Humphrey? 

Answer.  Mr.  Humphrey  made  occasional  calls  at  the  store. 
Question.  Mr.  Wyman  ? 

Answer.  He  is  unknown  at  the  establishment  to  me  and  others. 
Question.  How  did  you  learn  that  Mr.  Wyman  was  interested  in  the  con- 
tract ? 


36 


GOVERNMENT  CONTRACTS. 


Answer.  Only  from  Mather's  declaration,  and  from  his  name  appearing  in 
the  pay-book. 

Question.  As  one  of  the  contractors  I 

Answer.  Yes.  sir.  Stevens,  Wyman  &  Co. — that  is  the  way  I  have  seen  the 
receipts.  A  relation  of  this  Mr.  Wyman  was  appointed  also  as  leading  clerk  in 
the  storekeeper's  department. 

IClJNSON  GRAY,  sworn:  . 

Question.  Has  Mr.  Stevens  made  requirements  upon  the  government  officials 
to  obey  orders  ? 

Answer.  They  have  two  clerks  that  they  employ  that  are  paid  by  the  gov- 
ernment. 

Question.  Doing  this  work  I 
Answer.  Yes,  sir. 

Question.  What  clerks  ;  what  is  their  position  I 
Answer.  C.  TV.  Baum  is  one. 
Question.  What  salary  ? 
Answer.  $1,100. 

Quesrkm.  Who  is  the  other  clerk  ? 

Answer.  John  Dempsey.    I  think  he  has  $800. 

Question.  What  is  their  proper  duty  to  the  government ;  what  offices  do  they 
fill  as  government  officials  ? 

Answer.  Baum  is  receiving  clerk,  to  receive  the  goods ;  and  Dempsey 
answers  questions  from  the  books,  and  is  general  clerk  in  the  office. 

Question.  That  is  what  the  government  expect  of  them  ? 

Answer.  Yes,  sir. 

Question.  How  do  they  occupy  their  time  ] 
Answer.  Baum  acts  as  foreman  for  the  contractors. 
Question.  Doing  what  ? 

Answer.  Foreman  of  the  laborers  of  the  contractors  ;  he  calls  the  roll  and 
keeps  an  account  of  time  and  labor. 
Question.  What  does  Dempsey  do  ? 

Answer.  He  makes  out  the  pay-roll,  and  attends  to  paying  off  the  men. 

Question.  Do  these  two  men  do  any  other  work  except  this,  of  any  amount? 

Answer.  They  do  some ;  they  do  other  work,  but  the  work  for  the  con- 
tractors takes  off  a  good  deal  of  the  time  for  the  government. 

Question.  Does  it  destroy  pretty  much  or  nearly  the  value  of  their  services 
to  the  government  ? 

Answer.  I  think,  in  the  case  of  Dempsey,  it  takes  about  two  days  in  a  week 
of  his  time ;  and  Baum,  more  or  less,  every  day.  He  goes  through  the  store, 
from  one  loft  to  another. 

Question.  Do  you  know  whether  any  complaints  of  this  have  been  made  to 
the  collector? 

Answer.  Xo,  I  do  not.  I  mentioned  the  subject  to  Mr.  Steadwell,  who  is 
deputy  in  charge,  and  he  told  me  to  let  them  continue  on  in  the  same  way  ? 

Question.  You  formerly  were  chief  clerk  and  then  became  storekeeper,  who 
appointed  you  storekeeper  ? 

Answer.  Mr.  Barney. 

Question.  When  ? 

Answer.  I  think  about  eight  months  ago. 

Question.  Have  any  other  men  been  removed  and  men  appointed,  at  the  sug- 
gestion of  the  contractors,  as  you  have  been  informed  ? 

Answer.  All  the  clerks  in  the  office  have  been  removed  with  the  exception  of 
his  Baum  and  Dempsey. 
Answer.  And  others  appointed  in  their  places  ? 


\ 


GOVERNMENT  CONTRACTS. 


37 


Answer.  Yes,  sir. 

Question.  This  is  done  at  the  suggestion  of  the  contractors  ? 
Answer.  Yes,  sir ;  I  think  so. 

Question.  Who  are  the  contractors  who  appear  as  the  ostensible  owners  of 
this  contract  ? 

Answer.  John  C.  Mather,  Francis  Bixby,  Simon  Stevens,  and  Mr.  Wyman. 
These  are  reputed  to  be  the  partners  ;  it  is  said  that  there  are  others. 
Question.  Is  John  C.  Mather  still  interested  in  the  store  ? 
Answer.  He  is  in  the  office  almost  every  day. 
Question.  Is  Bixby  there  ? 
Answer.  Yes,  occasionally. 

Question.  Since  the  change  in  the  contract  has  not  Mather  been  there  more 
than  before  ? 

Answer.  I  think  he  has. 
Question.  Bixby  about  the  same  1 
Answer.  About  the  same. 

Question.  How  is  it  with  Stevens  \  * 
Answer.  He  is  there  too. 
Question.  Is  Mr.  Wyman  there  ? 
Answer.  I  have  not  seen  him. 

Question.  You  do  not  know  of  any  other  parties  attending  personally  to  the 
matter  1 

Answer.  No,  sir. 

Question.  At  any  time  did  the  contractors  refuse  to  allow  the  store  to  be 
shut  in  pursuance  of  the  rules  1 

Answer.  I  recollect  one  time  Mr.  Stevens  was  in  his  office,  and  the  night 
watchman  reported  to  me  that  his  office  could  not  be  closed  :  that  he  had  some 
strange  man  there ;  ana1  it  was  kept  open  until  some  time  smer  the  store  was 
closed,  contrary  to  the  rules  of  the  store. 

Question.  Who  furnish  the  night  watchmen  ? 

Answer.  The  government. 

Question.  They  are  sworn  officers  ? 

Answer.  They  are. 

R.  M.  Blatchford,  sworn. 

Question.  Do  you  know  anything  about  the  management  of  this  labor  con- 
tract— the  public  store  contract  ? 
Answer.  No,  sir. 

Question.  Do  you  know  about  the  influence  which  these  gentlemen,  who  are 
contractors,  exercise,  in  the  removal  and  appointment  of  government  officials — 
clerks  ] 

Answer.  I  only  know  one  instance,  in  which — I  believe  he  was  one  of  the 
contractors — Mr.  Stevens  caused  the  removal  of  a  young  person  I  felt  very  much 
interested  in,  and  I  went  to  see  the  collector  on  the  subject,  and  whilst  I  was 
talking  with  him  about  it  Mr.  Stevens  came  in,  and  I  told  him  that  this  young 
man  had  been  removed  ;  that  he  was  a  friend  of  mine.  He  (Mr.  Barney)  said 
he  would  not  have  removed  him  if  he  had  known  that  I  felt  an  interest  in  him ; 
but  he  did  not  know  it,  and  did  not  know  very  much  about  the  removal.  It  was 
done  by  Mr.  Palmer,  to  whom  the  matter  was  committed ;  he  could  not  attend 
to  these  things  at  all.  He  sent  for  Mr.  Palmer,  and  he  told  him  he  had  removed 
him  at  the  suggestion  of  Mr.  Stevens.  Mr.  Stevens  said  when  he  came,  there 
had  been  some  charges  against  him  of  not  having  been  regular  in  his  habits — 
nothing  against  him  at  all  as  a  clerk.  That  was  the  first  I  had  ever  heard  of 
that.  And  Mr.  Stevens  said,  also,  that  he  heard  that  he  had  talked  about  his  public 
store  contract,  and  that  he  preferred  to  have  some  person  there  that  would  not  talk 


38 


GOVERNMENT  CONTRACTS. 


about  it.  The  idea  held  out  was  that  he  was  disagreeable  because  he  had 
spoken  about  these  matters.  He  had  been  there  eleven  or  twelve  years  and 
knew  everything  about  it.  and  Mr.  Stevens  intimated  that  he  had  another  person 
put  in  his  place  that  was  more  agreeable ;  the  idea  was  that  this  man  was  not 
agreeable,  and  not  that  he  had  ever  neglected  his  duties. 
Question.  "What  did  Mr.  Barney  say  aboul  all  this  matter] 
Answer,  lie  did  not  know  anything  aboul  it,  at  least  until  he  sent  tor  Mr. 
Palmer  and  Mr.  Stevens.  And  Mr.  Palmer  said  that  Mr.  Stevens  said  there 
w  as  some  charge  against  the  young  man.  He  told  him  afterwards  that  he  wanted 
to  see  Mr.  Stevens,  and  when  Mr.  Stevens  came  he  said  he  had  made  no  charge 
against  him.  The  idea  was  that  Mr.  Barney  could  not  attend  to  these  things  : 
he  could  not  give  his  time  and  attention  to  it;  that  he  was  overwhelmed  with 
business,  and  w  as  obliged  to  commit  it  to  others. 

Question.  This  was  the  only  circumstance  you  knew  in  connexion  with  these 
contractors  ! 

Answer.  That  is  all — that  Mr.  Stevens  was  the  one  that  had  caused  the  re- 
^moval  of  this  young  man,  and  one  of  the  reasons  was  that  he  had  been  against 
the  contract.    I  applied  very  hard  to  have  the  young  man  restored,  but  did  not 
succeed. 

GENERAL  R0DER  STORES. 

The  other  matter  of  inquiry  was  the  general  order  stores.  There 
are  many  bonded  warehouses  in  the  city  of  New  York,  but  the  col- 
lector selects  from  them  the  general  order  stores.  Within  one  day 
after  the  arrival  of  a  vessel  in  port,  the  captain  obtains  a  general 
order  to  unload  his  cargo,  and  all  goods  on  which  the  duty  has  not 
been  paid  are^to  be  taken  to  the  stores,  as  designated  by  the  collector, 
to  receive  goods  under  general  order.  The  evidence  shows  this  to 
be  a  lucrative  business  ;  goods  frequently  are  stored  but  a  short  time, 
and  sums  are  paid  nearly  double  what  the  owners  would  have  to  pay 
in  other  bonded  warehouses. 

In  the  examination  of  the  9th  of  September,  when  the  revenue 
officers  were  having  the  benefit  of  their  defence,  Hamilton  Bruce,  a 
deputy  collector,  inquiring  about  the  subject,  was  asked : 

Question.  Can  there  be  any  favoritism  shown  ? 

Answer.  No,  sir;  for,  by  direction  of  the  collector,  the  goods  go  in 
every  instance  into  the  nearest  store  of  the  district. 

Mr.  Bruce  was  evidently  trying  to  serve  the  collector  "too  well," 
for  Mr.  Barney  in  his  own  evidence  says: 

"The  general  order  stores  are  designated  by  the  collector  out  of 
the  bonded  warehouses.  The  principle  which  governs  me  in  selecting 
the  general  order  stores  is  that  the  location  shall  be  convenient  to  the 
place  where  the  goods  which  go  to  the  general  order  stores  are 
canded;  that  the  accommodations  in  the  building  shall  be  sufficient 
lar  the  district  to  be  served,  and  that  the  parties  who  are  proprietors 
fo  the  stores  shall  be  persons  on  wdhose  responsibility  and  integrity  I 
ofn  rely.7' 

Whereas  the  evidence  fully  shows  that  there  not  only  was  favor- 
itism, but  the  collector  did  not  make  the  selection,  but  gave  the 
general  orders  to  certain  parties  who  had  no  stores,  bonded  or  other- 
wise, and  suffered  them  to  go  among  those  having  general  orders,  and 


GOVERNMENT  CONTRACTS. 


89 


compelled  them  to  give  a  bonus  of  thirty  per  cent,  for  the  privilege 
of  retaining  it.  This  was  certainly  a  refinement  of  extortion  or  cor- 
ruption upon  the  practices  of  former  administrations.  Such  a  thing 
was  never  known  before,  and  was  reserved  for  the  party  who  had 
promised  ourselves  and  the  nation  that  official  corruption  was  to 
cease,  and  retrenchment  and  reform  were  to  be  once  more  inaugu- 
rated.   Alas  !  4 '  like  Dead  sea  fruits,  they  turned  to  ashes  on  the  lips." 

It  does  not  appear  that  Mr.  Barney  received  any  part  of  this  thirty 
per  cent.,  but  it  is  clear  that  he  was  notified  of  these  outrages,  com- 
mitted by  the  men  on  whom  he  had  showered  this  bounty,  and  he  did 
not  condemn  or  check  it. 

Some  idea  may  be  formed  of  the  value  of  the  general  orders  business 
on  the  North  river  side,  (which  one  witness  says  was  in  the  ring 
with  the  labor  contract.)  when  it  is  shown  to  be  worth  about 
$200,000.  And  the  haste  with  which  goods  are  sent  by  general 
orders  after  the  arrival  of  the  vessel  shows  very  much  self-interest  or 
an  overweening  desire  to  aid  friends.  The  following  evidence  will 
establish  the  above  propositions: 

Johx  Wilson,  sworn: 

Question.  What  is  the  general  order  of  storage  at  the  custom-house  ? 

Answer.  Under  the  old  law,  vessels  of  a  certain  tonnage  Avere  entitled  to  a 
general  order,  that  is,  for  sailing  vessels,  five  days — working  days — after  their 
arrival.  Well,  that  was  changed.  Before  that  Avas  changed  there  Avas  a  laAv 
put  through  by  Congress  by  which  steamers  had  the  right,  if  the  bill  of  lading 
so  expressed  it,  to  discharge  immediately  upon  entry,  if  they  chose  to  do  so. 
Sailing  vessels  have  been  cut  down  to  one  day  after  their  arrival  for  discharg- 
ing ;  they  haATe  the  right  to  go  to  Avork  the  next  day,  under  a  general  order. 

Question.  You  say  they  have  one  day  for  discharging  ? 

AnsAver.  Xo;  they  have  the  right,  after  they  have  arrived  here,  to  commence 
and  turn  any  man's  cargo  out  who  has  not  paid  his  duties,  avIio,  by  some  fault 
in  the  custom-house  or  his  oavii,  has  not  paid  his  duty  the  first  day  after  arrival. 

Question.  Who  is  benefited  by  that  general  order  ? 

Answer.  Always  the  vessel  and  the  proprietor  of  the  store  where  the  goods 
are  sent ;  not  the  owner  of  the  goods ;  it  is  to  his  detriment. 

Question.  They  get  a  general  order  for  all  goods  to  go  there  I 

Answer.  The  papers  are  on  board.  Suppose  you  are  an  importer  ;  you  have 
got  a  cargo  of  goods  coming  here;  the  goods  come  here;  the  vessel  takes  her 
general  order  immediately ;  the  store  is  right  across  the  way,  fifteen  or  tAventy 
yards  from  the  vessel;  this  is  a  long  entry;  it  has  taken  some  time  to  get 
through  the  custom-house;  you  cannot  get  through;  there  is  a  great  rush;  you 
have  to  go  through  all  the  forms,  and  you  cannot  get  your  permit  through ;  you 
haA'e  got  a  hundred  packages  of  goods,  and  because  you  cannot  get  your  permit 
through  those  goods  go  into  the  store  or  on  the  sideAvalk,  and  A^ery  likely  do  not 
go  into  the  store  at  all,  yet  they  will  charge  you  for  a  hundred  packages  SI 25, 
and  they  haA~e  never  seen  the  inside  of  the  store. 

Question.  Formerly,  you  say,  sailing  vessels  had  five  days  before  general 
orders  Avere  giA^en  ? 

AnsAver.  Yes,  sir.    That  Avas  changed  two  years  ago. 

Question.  To  one  day  ? 

AnsAver.  Yes,  sir;  one  day  after  arrival. 

Question.  Hoav  is  it  with  steamers  ? 


40 


GOVERNMENT  CONTRACTS 


Answer.  Immediately  on  entering,  it'  they  choose,  if  the  l>ill  of  lading  bo  ex 

pressed. 

Question.  The  collector  has  the  power  of  giving  the  general  order  and  saying 
what  storehouse  these  goods  shall  enter? 
Answer.  Yes,  sir. 

Question.  Are  there  different  districts  in  the  city  ? 

Answer.  Yes,  sir;  there  are  quite  a  number  of  districts. 

Question.  Who  fixed  the  prices  of  storage  of  goods  in  these  w  an-houses  I 

Answer.  They  generally  fixed  themselves.  About  three  or  four  year.-  ago  a 
great  deal  was  said,  and  there  was  complaint  by  the  merchants  of  New  York 
about  tli«'  exorbitant  charges  on  those  things  coming  into  this  general  order  of 
storage,  and  a  table  was  drawn  up  stating  what  the  rates  of  storage  should  be, 
and  I  think  on  the  largest-sized  packages  the  rates  should  be  forty  and  forty, 
that  is,  forty  cents  labor  and  forty  cents  storage,  that  is,  for  the  first  month. 
Labor  is  never  charged  but  once;  that  pays  for  putting  and  taking  out;  forty 
cents  storage  is  alw  ays  charged  for  the  first  month  ;  those  are  the  rates,  I  should 
say.  I  have  got  a  case  now  where  we  are  obliged  to  pay  something  like  a  dollar 
and  a  half  on  the  package,  instead  of  eighty  cents;  it  is  a  small  matter.  The 
person  does  not  want  to  go  to  the  Secretary  of  the  Treasury  or  the  collector, 
and  so  he  lets  it  go. 

Question.  By  whom  was  the  rate  of  storage  and  labor  fixed? 

Answer.  The  complaint  was  drawn  up  and  submitted  to  the  Chamber  of  Com- 
merce, and  they  thought  that  was  a  fair  rate.  The  warehousemen,  as  a  general 
thing,  do  not  go  by  those  rates  fixed  by  the  Chamber  of  Commerce. 

Question.  Have  the  rates  been  increased  latterly? 

Answer.  A  ery  much;  they  have  now  got  up  from  40  and  40  to  90  and  125, 
and  now  we  do  not  know  where  they  will  stop. 
Question.  Is  that  generally  so  now  \ 

Answer.  1  believe  it  is.    I  have  paid  a  great  deal  of  storage. 
Question.  Is  it  a  matter  of  general  complaint  ! 

Answer.  Y'es,  sir.  I  speak  of  my  own  merchants  ;  we  do  business  for  about 
one  hundred  and  twenty  importers. 

Question.  In  different  parts  of  the  city  I 

Answer.  All  over  the  city.   We  do  business  for  Philadelphia  and  Boston,  also. 
Question.  Different  districts  in  this  city  ? 
Answer.  Yes,  sir. 

Question.  Y'ou  were  speaking,  a  little  while  ago,  about  the  collector  proper 
sharing  in  this ;  if  he  shares  in  this,  it  is  done,  of  course,  with  the  proprietors 
of  stores  \ 

Answer.  I  do  not  know  that  it  is. 

Question.  If  he  does,  it  is  done  with  them  ? 

Answer.  Yes,  sir. 

Question.  Y'ou  were  speaking  of  Mr.  Humphreys. 

Answer.  I  said  I  always  believed  that  Mr.  Schell  had  some  connexion  with 
the  former  men  in  the  storage  business,  and  Humphreys  bought  them  out. 
Question.  Who,  under  Mr.  Schell,  had  control  of  the  general  orders  of  goods? 
Answer.  Quite  a  number.    1  do  not  know  that  I  can  give  all  of  them. 
Question.  Mention  some  of  them. 

Answer.  Mclntire,  Bixby  &z  Co.  was  the  main  firm;  they  had  the  contract  at 
No.  12  Broad  street;  and  there  was  Mr.  Squiers,  Sand  10  Bridge  street,  who,  1 
think,  was  always  fair  and  straightforward;  and  there  was  Mr.  Livingston,  M. 
S.  Briggs  &  Co.,  and  others. 

Question.  Bixby,  Mclntire  &  Co.;  what  had  they  to  do  with  the  general 
orders,  and  how  were  they  interested  in  the  general  order  of  storage?  had  they 
a  storehouse  in  which  they  stored  goods  ? 

Answer.  Yes,  sir. 


GOVERNMENT  CONTRACTS. 


41 


Question.  Where  is  (heir  warehouse  ? 

Answer.  They  had  56  and  78  Greenwich  street,  and  345  and  371  Washing- 
ton street,  and  I  think  they  had  (I  won't  be  certain)  also  102  and  104  North 
Moore  street. 

Question.  Did  they  own  these  stores  ? 

Answer.  Rented  them,  I  believe. 

Question.  Are  they  interested  now  in  the  general  orders? 
Answer.  I  believe  they  are  in  part. 
Question.  Do  you  know  who  is  interested  with  them  ? 
Answer.  No,  sir. 

Question.  Do  you  know  whether  Mr.  Humphrey  is  concerned  in  any  of  the 
stores  I 

Answer.  Only  from  what  was  said  to  me. 

Question.  What  was  said  to  you ;  by  whom,  and  where  ? 

Answer.  What  was  said  to  me  was  by  the  storekeeper.  I  asked  if  Mclntire, 
Bixley  &  Co.  carried  on  the  store,  (they  were  the  former  proprietors,)  aud  he 
said  they  did  not ;  but  that  Mr.  Humphrey  had  bought  them  out.  I  asked  if 
it  was  James  Humphrey,  broker,  from  Brooklyn.  I  was  told  it  was.  I  asked 
if  he  was  ever  there,  and  he  said  he  came  in  some  times  and  looked  about  and 
went  out  again.  I  remarked  that  I  supposed  he  came  and  got  his  money  and 
then  quit ;  that  was  all  that  was  said. 

Question.  These  men  first  hire  the  store  ? 

Answer.  Yes,  sir. 

Question.  And  then  the  business  they  do  is  the  receiving,  keeping,  and  stor- 
ing of  the  goods  sent  there  under  general  orders  \ 

Answer.  Yes,  sir;  and  the  more  they  swindle  the  merchants  of  New  Y~orkr 
the  more  money  they  make ;  because  they  do  swindle  them. 

Question.  They  do  now  in  this  high  rate  of  charges  \ 

Answer.  Yes,  sir;  it  is  shameful,  disgraceful — I  believe  that. 

Edward  C.  Johnson,  sworn: 

Question.  Where  do  you  reside  ?  ■ 

Answer.  I  reside  in  this  city. 

Question.  What  is  your  business? 

Answer.  I  am  in  the  bonded  warehouse  business. 

Question.  How  long  have  you  been  in  the  bonded  warehouse  business  ? 

Answer.  Nearly  ten  years. 

Question.  Where  are  your  stores  I 

Answer.  6,  8,  and  10  Bridge  street. 

Question.  Are  you  alone? 

Answer.  Of  the  firm  of  Squire  &  Johnson. 

Question.  You  have  been  in  the  bonded  warehouse  business  ten  years  ? 
Answer.  Y'es,  sir. 

Question.  During  that  time  have  you  stored  goods  under  the  general  order  ? 
Answer.  Part  of  the  time.    This  general  order  business  was  not  established 
until  during  the  last  five  or  six  years. 

Question.  How  were  goods  given  under  the  general  order  ? 
Answer.  The  collector  had  power  to  send  them  to  any  store  he  pleased. 
Question.  And  the  collector  would  send  them  to  your  store  ? 
Answer.  Yes,  sir. 

Question.  It  is  now  five  or  six  years  since  the  system  of  general  orders  was 
introduced  ? 

Answer.  Y^es,  sir. 

Question.  Still  the  colleotor  has  the  power  to  send  where  he  pleases  ? 
Answer.  I  think  he  has. 


42 


GOVERN  M  ENT  CONTRACTS. 


Question.  And  can  ehange  it  at  pleasure  I 

Answer.  Yes,  sir;  this  collector  has  changed  it.  There  is  no  law  of  Con- 
gress abort  it. 

Question.  Ea  this  city  divided  into  districts  ( 
Answer.  Yes,  sir. 

Question.  How  many  districts  are  there  now  I 

Answer.  There  were  before  the  present  collector  came  in  more  than  now. 
The  districts  od  the  East  river  are  from  Battery  to  Wall  st  reet,  from  Wall  street 
to  Pier  45,  and  from  Pier  45,  all  above  on  the  East  river.  The  vessels  coming 
within  a  given  district  are  required  to  discharge  at  the  store  of  their  district. 

Question.  Previous  to  five  years  ago  there  was  a  special  order  made  in  every 
case  ? 

Answer.  Yes,  sir;  except  that  if  a  merchant  has  regular  invoices,  and  all 
straight,  he  can  put  them  where  he  pleases. 

Question.  But  if  he  cannot  get  his  orders  through  the  custom-house  before 
the  time  for  unloading,  they  have  got  to  go  under  general  order  ? 

Answer.  Yes,  sir;  merchants  sometimes,  instead  of  getting  merchants'  orders 
prefer  to  put  their  goods  in  bond,  because  they  do  not  want  to  pay  duties  on 
them  immediately.  We  took  in  ten  thousand  chests  of  tea  yesterday  under 
merchants'  orders. 

Question.  You  received  those  ten  thousand  chests  of  tea  under  merchants' 
orders.    They  could  not  order  them  to  any  other  place  % 
Answer.  No,  sir. 

Question.  Suppose  this  ship  lands  in  your  district,  the  collector  would  not 
give  a  permit  to  take  the  goods  into  another  district  % 

Answer.  Yes,  sir ;  anywhere  the  merchant  pleases,  in  a  bonded  warehouse. 

Question.  Then  the  merchants  can  put  their  goods  where  they  choose  % 

Answer.  They  can,  if  they  have  an  invoice  and  everything  is  regular. 

Question.  Then  it  is  only  those  who  do  not  get  their  invoices  through  in 
the  required  time  that  have  to  go  to  the  general  store  % 

Answer.  Yes,  sir." 

Question.  But  those  who  get  them  through  in  time  may  put  them  where  they 
please  ? 

Answer.  Yes,  sir. 

Question.  But  they  must  put  them  in  a  bonded  warehouse  I 
Answer.  Yes,  sir,  if  the  duties  are  not  paid. 

Question.  Do  you  give  security  to  anybody  for  the  safe  keeping  of  those 
goods  '? 

Answer.  Yes,  sir;  we  give  bonds  to  the  United  States  government  that  we 
will  keep  those  goods  until  the  duties  are  paid ;  and  if  they  are  stolen  or  lost, 
that  we  will  pay  for  them  and  pay  the  duties. 

Question.  You  occupy  a  sort  of  official  relation  to  the  government  1 

Answer.  Certainly. 

Question.  That  is  the  reason  they  cannot  go  into  a  private  storehouse? 
Answer.  Yes,  sir. 

Question.  You  become  responsible  to  the  government  for  the  duties? 
Answer.  Yes,  sir. 

Question.  And  to  the  owners  of  the  goods  ) 
Answer.  Yes,  sir. 

Question.  Have  these  districts  been  changed  or  increased  since  Mr.  Barney 
came  in  ? 

Answer.  No,  sir;  I  think  that  they  have  been  diminished.  I  think  there 
may  be  nominally  just  as  many  districts,  only  Bowen  has  a  commission  on  the 
two  upper  ones  on  the  East  river.  Merle  &  Co.  have  one  of  the  general  order 
stores  and  we  have  one. 


GOVERNMENT  CONTRACTS. 


43 


Question.  It  appears  already  from  the  evidence  that  the  collector  has  power 
to  dispose  of  the  general  order  store.  Now,  are  the  rates  which  you  charge 
on  the  general  orders  fixed? 

Answer.  The  prices  are  fixed  by  the  Chamber  of  Commerce.  We  do  not 
charge  any  more  than  the  Chamber  of  Commerce  prices  ;  but  some  of  them  do. 
We  are  governed  by  the  Chamber  of  Commerce  prices.  These  are  double  the 
prices  the  merchant  pays  when  he  puts  his  goods  in  outside  stores,  as  business 
is  now-a-days. 

Question.  Are  there  men  that  have  bonded  storehouses  that  do  not  have 
general  orders? 

Answer.  Oh,  yes,  sir.    There  are  but  few  general  order  houses. 
Question.  Any  man  who  chooses  can  have  a  bonded  warehouse  by  giving 
security  ? 

Answer.  Yes,  sir. 

Question.  Then  the  merchants  go  where  they  can  get  cheapest  ? 
Answer.  Yes,  sir.    Or  where  they  think  there  are  the  safcst  and  most  re- 
sponsible men. 

Question.  When  Mr.  Barney  came  in  as  collector,  was  anything  said  to  you 
about  the  continuance  of  your  store  as  a  general  order  store  ? 

Answer.  No,  sir.    I  made  application  to  Mr.  Barney  to  have  it  continued. 

Question.  What  conversation  did  you  have  with  Mr.  Barney  about  that? 

Answer.  He  was  so  busy  I  did  not  talk  much  with  him.  He  did  not  under- 
stand it,  and  could  not  tell  me. 

Question.  Did  you  see  him  more  than  once? 

Answer.  I  saw  him  but  once,  though  I  went  half  a  dozen  times. 

Question.  Did  you  pursue  your  application  further  ? 

answer.  I  wrote  to  him  a  letter,  and  he  never  answered  me. 

Question.  Y^ou  wrote  your  letter  desiring  to  continue? 

Answer.  I  found  there  had  been  some  goods  sent  to  other  stores  not  general 
order  stores,  the  owner  of  which  was  was  a  democrat,  and  fought  us  all  the  way 
through.  I  wrote  him  a  saucy  letter,  and  that  was  the  only  way  I  could  get  an 
answer,  and  he  answered.  Then  I  wrote  an  apology  afterwards.  He  as  much 
as  said  I  should  retain  it.  He  did  not  say  so.  YTou  could  not  make  it  one  way 
or  the  other;  but  the  inference  was  that  I  should  retain  it;  and  I  then  wrote 
him  a  mild  letter  in  reply  to  that. 

Question.  What  then  happened  ? 

Answer.  I  did  not  hear  much  more  about  it.  I  kept  pushing  at  it  among  my 
friends.  I  went  to  Mr.  Opdyke  about  it,  and  he  said  I  should  certainly  retain 
it ;  there  should  be  no  mistake  about  it.  The  next  thing  I  heard  was,  that 
a  man  by  the  name  of  Lambert  called  upon  me  and  said  he  was  looking  around 
for  a  store,  that  he  had  the  general  order  business  for  that  district. 

Question.  Did  you  ask  why,  and  how  ? 

Answer.  I  asked  him  why.  I  told  him  I  was  a  republican  and  had  done 
more  for  the  .party  than  Mr.  Barney  had,  and  as  much  as  Mr.  Opdyke  had,  or 
any  of  the  rest  of  them,  and  I  thought  I  was  entitled  to  it. 

Question.  Did  you  inquire  how  he  got  it  ? 

Answer.  I  understood  he  got  it  from  Mr.  Barney,  and  I  tried  to  find  out,  and 
I  wrote  Mr.  -Barney  a  letter. 

Question.  He  spoke  first  about  commissions  ? 

Answer.  He  spoke  about  commissions.  He  had  this  conversation  with  my 
partner. 

Question.  What  did  he  say  about  it  ? 

Answer.  He  wanted  33^  per  cent,  of  the  whole  business. 

Question.  What  do 'you  mean  by  the  whole  business? 

Answer.  The  general  order  business,  everything  that  was  coming  in  ;  we 


44 


GOVERNMENT  CONTRACTS. 


were  to  pay  all  the  expenses,  and  our  expenses  were  to  come  out  of  the  other 
two-thirds.  He  was  to  have  one-third  of  the  grOBB  amount.  We  did  not  give 
him  that,     lie  said  there  was  a  .Air.  Hill  up  then;  would  pay  him  that. 

Question.  Is  Mr.  Hill  in  that  district  1 

Answer.  Yes,  sir.  He  is  a  democrat.  We  finally  agreed  to  give  him  (Lam- 
bert) 30  per  cent,  of  the  profits. 

Question.  How  often  do  you  pay  him  I 
Answer.  (  hice  a  month. 

Question.  Have  you  made  him  a  monthly  payment  ? 
Answer.  Yes,  sir,  half  a  dozen. 

Question.  Have  you  heard  whether  other  general  order  stores  are  paying 
commissions  ? 

Answer.  1  heard  that  Mr.  Merle  was. 
Question.  Do  you  know  of  any  others] 

Answer.  .1  think  there  are  no  others  on  the  East  river  side  On  the  North 
river  side  1  thiiAV,  though  I  do  not  swear,  that  they  are  in  company  with  them 
and  do  not  pay  commissions. 

Question.  Who  has  it  ? 

Answer.  1  guess  John  0.  Mather  is  one.  1  do  not  remember  their  names  : 
they  are  in  the  ring.  Humphrey  is  one.  I  suspect  that  that  contract  and  the 
general  order  business  on  the  North  river  are  in  the  ring.  I  do  not  know  about 
it,  but  I  think  so. 

Question.  Have  you  made  any  estimates  of  the  profits? 

Answer.  On  the  North  river.  I  estimate  that  in  good  times  there  is,  on  an 
average,  three  steamships  from  Europe  a  week  arriving  on  the  North  river;  every 
one  of  those  steamships  go  into  general  order  ;  that  is,  when  I  say  every  one, 
I  mean  generally  ;  if  there  are  any  that  do  not,  they  are  an  exception,  and  I 
judge  that  they  are  worth  a  thousand  dollars  apiece. 

Question.  How  do  you  mean  they  are  worth  that,  gross  or  net? 

Answer.  I  think  gross  after  the  labor  is  expended.  That  would  be  $156,000 
a  year,  and  then  there  is  any  quantity  of  other  ships  arriving  the  whole  time 
which  would  pay  the  expenses.  I  should  say  there  was  a  profit  of  8156,000  a 
year  of  the  general  order  business  on  the  North  river,  and  then  other  business 
is  always  connected  with  that  business.  Any  one  of  those  stores  that  has  the 
general  order  business  on  that  wdiole  river  would  make  a  hundred  thousand  dol- 
lars* a  year. 

Question.  When  you  were  asked  to  pay  this  thirty  per  cent.,  did  you  write  to 
Mr.  Barney  about  it  ? 
Answer.  1  did. 

Question.  What  did  you  state  ? 

Answer.  I  told  him  that  a  man  had  come  and  said  he  had  authority  from  him 
(Mr.  Barney)  to  exact  that  thirty  per  cent. 

Question.  Did  Mr.  Lambert  say  he  had  the  authority  from  Mr.  Barney  to 
<ixact  the  thirty  per  cent.  ? 

Answer.  YYs,  sir.  I  wrote  to  Mr.  Barney  asking  him  if  Mr.  Lambert  had 
such  authority.  I  did  not  like  to  pay  it  unless  I  knew  the  man  had  authority. 
I  never  had  any  answer. 

Question.  How  long  ago  did  you  write  ? 

Answer.  That  was  along  last  summer  some  time. 

Question.  You  never  got  any  answer;  and  Mr.  Lambert  continued  to  come  for 
his  monthly  percentage  ? 

Answer.'  Y'es,  sir.  He  said  that  Mr.  Bowen  had  the  whole  of  that  East  river, 
but  that  he  had  given  that  district  to  him,  or  something  of  that  kind. 

Question.  Did  Mr.  Bowen  have  a  storehouse  ? 

Answer.  No,  sir. 

Question.  Did  Mr.  Lambert  have  a  storehouse? 

Answer.  No,  sir.    I  presume  Mr.  Lambert  could  not  hire  a  store. 


GOVERNMENT    CONTRACTS.  45 

Question.  Did  you  ever  before  hear  of  general  orders  being  given  to  persons 
who  had  no  storehouse  ? 

Answer.  No,  sir.  It  is  done,  I  suppose,  to  give  those  persons  a  chance.  I 
went  to  see  Mr.  ( Jpdyke  and  told  him  the  general  order  business  was  worth  a 
good  deal  of  money  to  anybody  that  could  get  it.  I  did  not  ask  any  promise  of 
him,  but  he  did  promise  me  that  there  should  not  be  anything  done  about  it 
until  I  was  consulted. 

Question.  You  told  him  how  much  those  general  orders  were  worth  on  the 
Hudson  river  ? 

Answer.  Yes,  sir;  after  they  had  got  control  of  the  general  orders,  and  I  told 
him  that  it  had  been  taken  away  from  me  in  that  shape,  he  said  it  was  out- 
rageous. 

Question.  Does  this  other  firm,  Humphrey  &  Co.,  have  all  the  business  on  the 
North  river'? 

Answer.  All  the  general  order  business,  and,  I  think,  that  that  labor  con- 
tract also. 

Charles  Squire,  jr.,  sworn  : 

Question.  I  will  ask  you,  first,  when  Barny  took  his  place  as  collector,  did 
you  do  anything  to  secure  the  storage  of  goods  under  general  orders  ? 
Answer.  1  did  not. 

Question.  What  was  the  first  intimation  you  had  of  any  change  of  storage  of 
those  goods  ? 

Answer.  The  first  I  knew,  a  gentleman  came  into  the  store  and  told  me  the 
district  had  been  given  to  him. 
Question.  What  was  his  name  ? 
Answer.  F.  Lambert. 

Question.  Just  tell  us  what  conversation  you  had,  and  what  was  done. 
Answer.  He  said  he  was  willing  to  make  an  arrangement  with  me  whereby  I 
could  keep  it,  by  paying  him  a  certain  percentage  on  the  amount  received. 
Question.  How  much  percentage  did  he  claim  first  ? 
Answer.  33^  per  cent,  upon  the  amount  received. 
Question.  What  was  said  to  that  ? 

Answer.  I  told  him  I  would  think  about  it,  and  give  him  my  answer  within 
a  few  days  ;  when  he  came  again  I  told  him  that  it  did  not  amount  to  very 
much,  but,  as  business  was  dull,  (we  were  doing  very  little,)  rather  than  lose  it 
I  was  willing  to  give  him  thirty  per  cent,  on  the  storage.  I  said  that,  of  course, 
I  wished  the  arrangement  to  be  sanctioned  by  Mr.  Barny.  He  said  that  it 
should  be,  but  it  never  has  been,  and  I  do  not  think  Mr.  Barny  knew  anything 
about  it,  or  knew  the  man;  I  do  not  believe  he  ever  spoke  to  him.  I  have  since 
ascertained  it. 

Question.  He  came  there  and  represented  that  he  was  doing  it  with  the 
authority  and  approbation  of  Mr.  Barny  ? 
Answer.  He  represented  it  so  to  me. 
Question.  When  was  it  that  he  came  ? 
Answer.  About  the  1st  of  September. 
Question.  Have  you  paid  him  the  thirty  per  cent,  since  ? 
Answer.  I  have,  on  all  goods  delivered. 

Question.  Did  you  ever  communicate  with  or  see  Mr.  Barny  in  this  matter? 
Answer.  I  never  have. 

Question.  Did  you  ever  write  to  Mr.  Barny  ? 
Answer.  I  did  not.    I  believe  my  partner  did. 

Question.  Never  got  any  answer  that  you  know  of  about  that  matter  ? 
Answer.  I  never  got  any  answer ;  the  letter  was  a  personal  letter  from  Mr. 
Johnson.    I  did  not  want  to  have  anything  to  do  with  it,  and  I  do  not  know 


46 


GOVERNMENT  CONTRACTS. 


much  about  that.  He  wrote  tins  letter  from  his  own  place  of  business  to  Mr. 
Barny,  and  I  do  not  know  anything  about  it. 

Question.  You  never  had  any  conversation  or  correspondence  with  Mr.  Barny 
about  this  matter? 

Answer.  Never. 

Question.  Th(* agreement  you  and  Lambert  made  you  put  in  writing  1 

Answer.  Yes,  sir;  and  requested  him  to  have  Mr.  Barny  approve  it;  and  he 
put  it  in  writing  and  took  it  to  Mr.  Barny  to  get  his  sanction  to  it,  and  he  came 
back  without  it,  making  some  excuse  for  it.  He  afterwards  said  he  had  been 
introduced  to  Mr.  Barny,  and  that  was  sometime  after  the  affair;  so  I  think  he 
did  not  know  Mr.  Barny  at  all  at  the  time. 

Question.  You  do  not  know  anything  about  Bowen  &  Lambert  having  this 
contract  for  the  general  order  storage  ? 

Answer.  1  was  told  he  had  the  principal  part  of  the  East  river;  my  general 
order  storage  is  not  worth  anything  of  any  account  ;  and  that,  I  suppose,  is  the 
reason  why  I  have  not  been  disturbed. 

Question.  Who  has  the  general  order  storage  on  the  North  river? 

Answer  I  have  understood  Mr.  Humphrey  ;  young  Marshall  is  connected 
with  him.  I  do  not  think  Bowen  has  anything  to  do  with  that  side.  That  is  a 
perfect  placer;  there  is  a  great  deal  of  money  in  the  general  order  storage  on 
that  side  for  the  four  years. 

Question.  Y"ou  mean  to  say  that  they  can  hire  warehouses  and  store  the 
goods,  and  pay  the  expense  of  storage  and  their  rents,  and  have  a  fortune  be- 
sides ? 

Answer.  The  expense  of  storage  is  labor,  and  that  they  get  back  with  every 
package,  and  more  too,  because  they  charge  labor  on  every  package ;  they  hire 
the  stores  and  pay  the  rent,  and  that  is  expense  that  must  come  out  of  storage. 
Then  every  steamer  that  comes  in  sends  in  nearly  her  whole  cargo.  On  every 
package  they  charge  eighty  cents.  If  the  thing  goes  into  the  store  it  pays 
eighty  cents  for  cartage,  storage,  and  labor ;  that  is,  thirty  cents  storage,  thirty 
cents  labor,  and  twenty  cents  cartage  ;  and  they  get  thirty  cents  for  the  labor  it 
it  comes  right  in  and  goes  right  out.  Then  they  get  twenty  cents  for  the  cart- 
age, although  the  carmen  bring  three  or  four  on  a  load,  and  it  is  thirty-eight 
cents  a  load  ;  then  the  storage  is  thirty  cents.  In  every  bonded  warehouse  there 
must  be  a  custom-house  officer,  which  the  bonded  warehouseman  pays. 

Question.  Then  they  realize  money  in  that  way,  no  matter  what  they  pay  for 
cartage ;  they  charge  so  much  on  every  package. 

Answer.  Yes,  sir. 

Question.  Do  they  charge  more  on  large  packages? 
Answer.  If  it  made  a  single  load  I  presume  they  would. 
Question.  Were  you  ever  required  before  to  pay  a  percentage  on  general 
order  goods? 

Answer.  Not  until  this  time. 

Frank  Squires,  sworn : 

Question.  With  whom  did  you  make  the  arrangements  to  take  the  goods 
under  general  orders  ? 

Answer.  Mr.  Edward  0.  Bowen  and  Lambert. 

Question.  Did  you  ever  call  upon  Mr.  Barney  in  relation  to  the  matter  ? 
Answer.  No,  sir. 

Question.  Did  you  ever  request  anybody  to  call  ? 
Answer.  I  think  I  had  Mr.  Merle,  sen.,  call  upon  him. 
Question.  He  called  upon  Mr.  Barney  ? 

Answer.  I  think  so.  } 


GOVERNMENT  CONTRACTS. 


47 


Question.  After  you  rented  the  stores,  did  the}'  propose  to  rent  the  stores 
from  you  ? 

Answer.  No,  sir ;  they  proposed  to  form  a  copartnership  with  us  in  the 
general  order  business. 

Question.  Did  you  enter  into  a  copartnership  with  them  ? 
Answer.  xVs  far  as  the  general  orders  were  concerned. 

Question.  Then  you  understood  they  had  control  of  the  general  orders  in 
that  district  I 

Answer.  Yes,  sir. 

Question.  What  was  their  first  proposition  with  your  firm  ? 

Answer.  Simply  that  they  should  enter  into  copartnership  with  us  on  con- 
dition that  we  should  give  them  a  certain  percentage  of  the  business.  What 
the  preliminaries  were  I  cannot  tell. 

Question.  What  was  the  result  ? 

Answer.  The  result  was,  we  entered  into  a  nominal  copartnership — that  is  to 
say,  so  far  as  the  general  orders  are  concerned ;  it  is  independent  entirely  of 
our  warehouse  business. 

Question.  You  pay  a  percentage  for  the  general  order  business  ? 

Answer.  We  give  them  a  share  of  the  general  order  business,  whatever  it 
happens  to  be. 

Question.  There  is  no  real  partnership  1 

Answer.  Nothing  further  than  that. 

Question.  What  percentage  do  you  pay  ? 

Answer.  Thirty  per  cent. 

Question.  These  gentlemen  invested  nothing  ? 

Answer.  No,  sir. 

Question.  Did  not  run  any  risk  ? 

Answer.  No,  sir. 

Question.  Do  they  give  you  anything,  as  a  return  for  this  thirty  per  cent, 
which  they  have,  except  bringing  you  the  business  ? 
Answer.  That  is  the  return  we  get. 


CONCLUSION. 

Your  committee  has  thus  completed  its  labors,  having  taken  much 
evidence  on  various  subjects,  and  reported  at  different  times  to  this 
House.  Many  frauds  have  been  exposed,  the  government  relieved 
from  many  unconscionable  contracts,  and  millions  of  dollars  saved  to 
the  treasury.  Yet  it  is  a  matter  of  regret  that  punishment  has  not 
been  meted  out  to  the  basest  class  of  transgressors.  They  to  whom 
this  duty  belonged  seemed  sadly  to  have  neglected  it.  Worse  than 
traitors  in  arms  are  the  men,  pretending  loyalty  to  the  flag,  who  feast 
and  fatten  on  the  misfortunes  of  the  nation,  while  patriot  blood  is 
crimsoning  the  plains  of  the  south,  and  bodies  of  their  countrymen 
are  mouldering  in  the  dust. 

"  May  life's  unblest  cup  for  such 
Be  drugged  with  treacheries  to  the  brim." 

The  leniency  of  the  government  towards  these  men  is  a  marvel 
which  the  present  cannot  appreciate  and  history  never  explain. 


Avery  Architectural  and  Fine  Arts  Library 
Gift  of  Sfymour  B.  Durst  Old  York  Library 


6o*u3 


